|
With unemployment on the rise, more and more people are looking at home-based businesses as a useful way to make a living or to earn extra money during these tough economic times. Whether you’re doing medical billing, Web design, auctioning art on eBay or setting up any of the myriad other types of businesses that can be run from home, you should be careful to have adequate insurance, according to the Insurance Information Institute (III).
“Most homeowners policies specifically exclude business liabilities,” said Loretta Worters, vice president of the III “Even though your home-based business may involve only yourself working just part time, you could still have liability risk. For example, someone may come to your home for a business purpose—such as delivering materials—and sustain an injury on your premises for which they believe you are responsible. In that case, your homeowners policy would probably not cover the damages.”
There are three ways to provide more property and liability insurance for your home-based business. The right choice will depend on the nature of your business, its annual receipts and the amount of coverage you need.
Endorsement to your homeowners policy:
Your homeowners insurer may offer an endorsement to your policy that adds additional property coverage and some limited liability coverage. For less than $20 a year, you may be able to double your standard policy limits for business equipment from $2,500 to $5,000. This option is usually limited to businesses that generate less than a set amount of annual receipts, usually around $5,000.
Home-based business insurance policy:
Some insurers offer specific home-based business insurance policies with some of the same features as larger commercial policies but with lower policy limits and at a lower premium. With this coverage, generally at a price of less than $300 a year, you can insure your business property for $10,000. The policy includes general liability coverage with the limit you choose, between $300,000 and $1 million. Should you have to shut down your business because of damage to your house, the home policy will cover the income the business loses and ongoing expenses, such as payroll, for up to one year. The policy also provides limited coverage for loss of valuable documents, accounts receivable, offsite business property and use of equipment.
Business owners policy (BOP)
Many insurers offer small business owner policies combining a wide variety of coverages in a single policy. You may want to talk to your insurance agent or company representative about whether the broader property and liability coverages you would get with a Business Owners Policy are recommended for your business.
Your personal auto policy probably provides coverage for some business use of your vehicle. A personal auto policy is unlikely to provide coverage, however, if the vehicle in question is used primarily in business. And it will not provide coverage for any vehicle owned by a business.
Furthermore, if you drive your auto for a business purpose and get into an accident for which you are liable, an injured person could sue you personally. Will your personal auto policy have enough coverage to pay all the damages? If not, a lawsuit may be filed against your business. You should discuss whether you need a business auto policy with your insurance agent or company representative.
States have varying rules about when an employer must provide workers compensation insurance. If you have three or more employees, you should check with your state department of workers compensation to see if you are required to provide workers comp insurance.
|
British Citizens:
Canadian Citizens:
