Insurance Insight: Business In The Home

It’s no secret, Saline County is a great place to live and work! In meeting with my clients, I’m finding that more and more people are working from home.

How many of you know someone who is running a business out of their home? Through social media, it’s easy to recognize that many friends and families have side-jobs outside of their normal 8-to-5 careers. Plus, many stay-at-home moms or dads have found they can excel at an in-home business.

The savings on gas and time is a huge benefit. Plus, advances in technology have brought people who are miles away from us closer than ever! But setting up headquarters in your home doesn’t mean your homeowners insurance will adequately protect your operation. If this affects you, it’s a good idea to meet with your insurance agent and make sure you know what’s covered and at what limits.

According to Loretta Worters, Vice President of Communications for the Insurance Information Instititute, “A typical homeowners policy provides about $2,500 of coverage.” That will usually cover equipment—but it won’t offer liability protection or cover you for lost data or income. Do your research to protect yourself and your home business. “An important thing for any business owner to do when starting out is to create a business plan,” says Worters.

Coverage Options

In general, home-based business owners have three basic options:

Homeowners policy endorsement: This is added to a homeowners policy to increase coverage on business equipment. There also may be the option to buy a homeowners liability endorsement for protection in the event someone—say, a delivery person—is injured on your property.

In-home business policy: An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. These policies, which may also be called in-home business endorsements, vary significantly depending on the insurer.

Business-owners policy: This plan offers the most comprehensive coverage for small- and mid-size businesses. It protects against many of the same things that in-home business policies do, but offers even more coverage. For example if you run an alterations business out of your home and customer’s clothes are damaged in a house fire, the business owners policies covers that.

Other Considerations

Being a savvy home-business owner is about more than having the right insurance. Other factors to consider include the following:

Additional insurance: Re-evaluate your coverage as your business grows and your needs change.

Zoning laws: Visit your local planning office to review restrictions that could affect your business.

Licenses and permits: Find out which licenses and permits you need to run your business legally.

Taxes: Talk to a tax professional about tax laws for home-based businesses. Also research money-saving deductions, such as the home office deduction.

These considerations aren’t just for the home. They can pertain to your car insurance as well. Talk to your agent about how you use your vehicle. If it’s mainly used for business, you may need to put a business rating on it so the insurance company an adequately price you as an exposure.

As we all know, policies and coverages will vary from person to person, and in this case, business to business. If your business is already in full swing and you haven’t reviewed this with your agent, it’s not too late! It’s always better to play it safe and be prepared.