- Dan Frankel
Home office insurance tips
Updated: Jun 2, 2022
There has been an explosion in the number of home-based businesses in recent years, along with an alarming number of home business owners that aren’t properly insured.
Questions to ask: Do you need property insurance for your office equipment or inventory? What about liability, should someone be injured on the premises. If a fire or water damage made it impossible to work, what about lost income/business interruption coverage?
Ask yourself the right questions
In the unfortunate event of theft or fire, how much would it cost to replace your office furniture, printers, computers, phone system, inventory, etc.? If your laptop is stolen from your car or hotel room, will you be satisfied with a $250 claim settlement? Can you ensure that clients or associates will never visit you at your “office”?
If you answered “no” to any or all of the above, you need to revisit your insurance coverage for your business.
How to buy the right coverage
Here are four different ways to buy insurance coverage for your home business.
Endorsements to your homeowners insurance are the least expensive way to boost your homeowners insurance to better cover your office equipment. Endorsements are attachments to a policy that either add coverage or expand the limits of existing coverage. Some companies have now developed endorsements for business liability. For instance, you may be able to double the standard coverage in your homeowner policy for business equipment. Typically this method is for very small businesses or small home offices (the type of businesses that don’t typically have employees or clients in the house). If you operate a larger business with a greater investment in equipment or generate revenues in excess of $250,000 annually, you will want to discuss one of the three other options with an agent.
Commercial Package policies with individual sections for business property, liability and business income protection are appropriate for larger ventures. This approach allows you to select the appropriate coverage in each area for your business, each coverage is priced individually on an à la carte basis.
Home based business owners may choose to purchase a BOP, or Business Owners Policy. BOPs are designed with small businesses in mind, are crafted for specific types of businesses, and provide a broad spectrum of coverage. Typical coverages under a BOP include property, liability, lost income, record recreation and coverage for money and securities, all at a reduced rate when compared to a Commercial Package Policy.
Finally, an In-Home Policy is essentially a mini version of the BOP with preferred pricing. Coverage includes expanded coverage for business equipment, general liability up to $1 million, income lost due to damage to your home, some coverage for loss due to damaged records, money lost on premises, and advertising liability. Talk to us about availability of this solution in your state.
Other considerations
Are you using your vehicle for business?
If you’re making trips to your clients’ offices, delivering or picking up supplies, you need to ensure that any accidents that occur on business-related travel are covered by your auto policy. Even if your employees are just using their own car to pick up lunch or go to the bank, you have an exposure if they are considered “on company time”. Please contact Acacia Insurance to determine if you simply need to add business travel to your personal policy or whether you require a separate business policy.
What about disability insurance and workers compensation?
If you are unincorporated or an excluded executive officer of a corporation, you are not covered by Workers Compensation. You should strongly consider a long- term disability program to meet your personal financial commitments in the case that you are unable to work.
Are you hiring?
If your home based company is growing, don’t forget that you’ll need workers compensation insurance. This mandatory coverage pays for medical costs for employees injured on the job and disability compensation if they are unable to work as a result. How do you get the right protection for your home business? Naturally you want the best coverage for the best price. The right package has comprehensive coverage without gaps and avoids overlap with your homeowner’s policy.
Are you consulting?
Many people who run a business out of their home are engaged in consulting work. Even if you only consult part-time you still probably have a significant professional liability exposure. Let us work with you to make sure that you are properly insured in case of a lawsuit.
Ready to learn more?
Acacia Insurance has been helping to make the unexpected uneventful since 1988, and we look forward to working with you. Please contact us with questions and for additional information.