Are you running a business from your home office? If so, you may need more insurance coverage than you realize.
Take a look at some considerations below.
Your homeowner’s policy is not enough
Homeowner’s policies are designed to provide the coverage needed for general use. This means that they cover items typically found in a home and accidents that occur within the home.
If you have business-related items in the home or have customers and clients visiting, you need additional coverage — most homeowner’s policies have exemptions for business use.
The value of your business items
Depending on the nature of your business, you may require pricey items that are not normally found in homes. For example, what if you need something like a 3-D printer? The more niche the items and the more they cost, the greater your need is for an additional policy. Most standard homeowner’s policies will offer you less than $2,500 in coverage for business items.
The possibility of injuries
There’s no shortage of stories about people slipping and falling in a business and then suing them. As soon as your home becomes a business, you are opening yourself up to greater liability and will need the right amount of coverage to protect you.
Your insurance company defines business differently than you do
This is incredibly important to understand. To you, your home office may just be for a hobby that happens to make you money, or it might be just a side gig — not a full-time job and certainly not a business.
But there are some criteria that could cause your insurance company to label your home office as a business. In some cases, all you need to do is complete activities that make you money—even if it is just selling crafts you make for fun. Occasionally, even volunteer work can be categorized as a business.
Getting the coverage you need
In general, there are two options. The first is to get an endorsement that expands the coverage of your current homeowner’s policy. The second is to take out a separate policy for your business. If your business is small, an endorsement should be enough, but larger businesses benefit most from having their own policy.
To find the right policy for your needs, contact your insurance broker.
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