The Small Business administration reports that 50 percent of small businesses are home-based. If you count yourself as part of that 50%, you better know what kind of business insurance you need. Technically, you work from your home, so your homeowner’s insurance covers your belongings. However, homeowner insurance was never meant to cover all the parts that businesses have. So you better know what your options are when it comes to protecting your business.
The three types of insurance that will be helpful to have if you run an in-home business include.
- An in-home business policy,
- Business owner policy (BOP),
- Policy rider to a homeowner’s policy.
These would help cover most situations and will also help cover you if your business were to grow to include employees or other business expansion.
1. In-home Business Policy
An In-home business policy provides coverage for injury and theft for up to 3 employees. They tend to cover up to $10,000 worth of losses and average somewhere between $250-$500 a year on average. Similar to how a homeowner’s insurance policy provides coverage for injuries and theft. However, this one covers your business explicitly and therefore, will not affect the liability coverage limit on your homeowner’s insurance policy. Most of this insurance operates on the idea that your business and home should be separated even though they are, technically, the same place. Using that mindset helps provide perspective about many types of coverage.
2. Business Owners Policy
A Business owner’s policy or BOP is not just essential for those who have home business, but for most small business owners period. This policy provides all the basic needs of any company. At the cost of less than $50 a month, your business can insure for amounts over the $10,000 limit mentioned before. This package is meant to be comprehensive and provides coverage for professional liability, employee, contractor, or customer injury, loss of income, business interruption, and even driving a car for business in some cases. If you grow, then this policy will be especially helpful as you move up in size and scale.
3. Rider on Homeowners Policy
The most inexpensive form of business protection is a policy rider on your home policy. Typically this is an add-on to your homeowner’s policy that helps cover something business-related. A separate business owner’s policy is not necessary if you work from home and don’t have customers coming directly to your house. However, a small rider to cover deliveries for your business or for an expensive computer or something in that vein could cost you less than $20 and cover you for thousands of dollars. Choosing what is right for you is all part of being a business owner.
No matter what you choose, talk to your homeowner’s insurance agent to find out what is covered, what isn’t, and what option would work best for you!