It seems these days you have to have insurance for everything: there’s car and health; homeowners and rental; business and even pet insurance. You have to make sure your bread and butter-the thing that pays for everything else-is covered tightly and securely by an insurance policy, but where do you start, and what do you consider?
First, you have to ask yourself what you would want to have covered. If you’re a photographer, you would have your cameras and other tools of your trade; a graphic designer, and all your software and computers would have to be covered. It’s important to identify what kind of business you run from your home, who enters your place of business, and what you have that could potentially be broken or stolen.
But, you have business insurance coverage, you say? Well, take a look at your policy and be certain you are covered according to the specifics of your business, not just the generic coverage you generally get with a business insurance package. Also, don’t think that if you don’t have business insurance, that surely your homeowners insurance will cover the costs; most homeowner policies limit loss of business property to $2,500 and don’t cover losses away from the home, and exclude liability coverage for business related activity.
- There are three different types of insurance. To determine which you need you must ask yourself the following:
- How much would it cost me to replace all my equipment?
- How often do I take my laptop and cellphone out to meet with a client?
- How often do clients meet me at home?
- How often are there business deliveries to my home?
- Do the products I sell have the potential to harm or cause someone to claim harm?
- What would happen to my business if I were temporarily displaced from my home?
- Business Owner’s Policy: This includes both liability and property damage coverage, and also provides some off-premises coverage. Things like flood protection or insurance for outdoor signs are optional.
- Home Office Policy-this policy combines homeowners and business insurance, eliminating duplicate coverage or gaps. It also covers general business liability, lost income and ongoing expenses like payroll for up to one year if your business can’t operate due to damage to your home. Loss of records, accounts receivable, and even some off-site business property, fire theft and personal liability are also covered. Flood insurance is, again, optional.
- Business Pursuits Endorsement: This is part of your homeowner’s policy and offers the least amount of protection. Not recommended if you have costly equipment or if you have any onsite visits.
Of course, be smart about your business, and be smart about your insurance. Choose the one that fits best for you, and take the necessary precautions to keep from ever having to use it.