Home-Based Business Owners Face Unique Risks

More and more people are running businesses out of their homes. Here are some of the potential issues home-based business owners face both in the start-up phase and as the company grows.

Personal property coverage

Most homeowner’s policies limit coverage for personal property used in business. Why take chances? If they’re stolen or damaged, the cost of replacing your computers, printers, scanners and fax machines can add up. Coverage for business property on the premises is limited to a few thousand dollars, and off premises it’s more like $250.

Injuries on the premises

If your Aunt Edna falls at your house or your dog bites your child’s best friend, your homeowner’s policy is there for you. However, if a client is injured in your home while on business, your homeowner’s policy may not cover his or her injury.

Vehicle use

If you use your vehicle for business, you face additional exposures. As your business grows, you may need a separate auto policy. In the meantime, covering your vehicle for infrequent business use may be as simple as notifying your auto carrier, who will charge a small additional premium to protect you when you drive on business.

And more …

These are just a few of the problems you can face when you have a home-based business. There are many more.

For example, if you offer professional services such as tax preparation, you probably need errors and omissions coverage.

If you groom pets, you may need risk coverage for a client’s animal who bites your neighbor. If you resell products online, you may need coverage for liability arising from the performance of these products.

Never assume your current homeowner’s policy will provide coverage for all the risks your business generates. If you have a home-based business or are considering starting one, discuss insurance options with your advisor.