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Do You Need Insurance For A Home Business?

Insuring Your Home Business: A Guide to Coverage Options

Many home-based business owners often overlook the need to purchase business insurance because they are unaware of its necessity. Although they have home insurance policies, they do not realize that these policies do not cover their home-based businesses. As a result, they neglect to secure the proper insurance coverage for their businesses.

Do You Need Insurance For A Home Business

What even is a Home Based Business Insurance Policy?

A home-based business operates from the owner’s primary residence. Although typical home insurance policies may cover some business-related items like books, tools, and assets, the coverage is usually limited and may not offer sufficient protection in case of loss. Therefore, it is essential to have separate home-based business insurance that will provide more comprehensive coverage for additional risks associated with running a business from home. This type of insurance policy is designed to offer protection beyond what a standard homeowner’s policy can provide.

How Can I Get Insurance For My Home Based Business

If you run a home-based business, you have several coverage options available. To ensure you have the right coverage, always discuss it with your broker. Your broker can help you determine the best option for your business needs.

In addition to discussing coverage options with your broker, it’s important to understand the risks and liabilities of running a home-based business. For instance, if clients or customers visit your home for business, you may need liability coverage for accidents. Also, if you store inventory or equipment at home, you may need property coverage for theft or damage.

Your broker can help you evaluate your risks and suggest suitable coverage options for your specific situation. By properly insuring your home-based business, you can shield yourself from financial losses and concentrate on growing your business confidently.

Option 1: Adding an Endorsement To The Homeowners Policy

Adding an endorsement or a rider to the property policy offers the most affordable option to obtain additional coverage for your home-based business. This type of insurance suits one-person businesses without a lot of valuable equipment and that don’t have clients visiting their home office. It is ideal for accountants, salespeople, or similar professions that don’t keep inventory at home and only use the home office.

You may wonder why you need a special insurance policy. Let’s say a delivery man slips in your driveway and gets injured while delivering a package. Your homeowner’s policy won’t cover that kind of damage, but by adding an endorsement or a rider, you’ll be protected against such perils.

Also, this coverage is not expensive, and if any losses such as a fire or another disaster occur, it won’t be a significant loss to your business.

Option 2: The Home Based Small Business Insurance Policy

If you run a home-based business and want to ensure coverage for your inventory and equipment, you have two options. You can either add an endorsement to your existing policy, which will have a lower premium. However, an endorsement does not cover inventory, equipment, and liability for injury. Alternatively, you can purchase a new home-based business policy, which has a higher premium but provides comprehensive coverage for your business assets and potential liability risks. This option is ideal for businesses that have a significant number of clients visiting their home or store a large inventory on-site.

Option 3: Business Owner Insurance Policy

The last available option for business insurance is to buy a business owner insurance policy. This type of policy is the most comprehensive and expensive option. Unlike the other two options, a business owner insurance policy covers the entire property and operations not on the property. This type of policy suits businesses operating out of a home office with a large amount of equipment or inventory.

AMC Insurance is your one-stop for all your insurance needs. To find out more, visit us on Facebook or our website or call us today.

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