3 Insurance Options for a Home-Based Business

3 Insurance Options for a Home-Based BusinessA home business has just as much potential for exposure to risk as any other brick and mortar business. Yet, nearly 60 percent of home-based business owners operate without the protection of insurance, according to a national survey conducted by International Communications Research (ICR).

So, why are home businesses less likely to purchase coverage?

Most home-based business owners believe that since their business is running primarily in a home, any business-related claims will be covered by their homeowner’s policy. However, this is not the case. A standard homeowner policy will provide no coverage, or very limited coverage, for home business claims.

Protect your home-based business from the financial turmoil of a business-related claim and consider the following coverage options:

  1. Homeowners Policy Endorsement– Some insurers offer an inexpensive business endorsement, or rider, to the existing homeowner policy. Although this endorsement can provide added protection for business equipment, such as computers, coverage is not adequate for more expensive equipment. The endorsement also does not provide business liability, and is limited to only certain types of business.
  2. In-Home Business Policy– This policy provides more comprehensive coverage for business equipment and liability. Most company policies will reimburse the business owner for the loss of important paper and records, accounts receivable and off-site business property. Some even provide coverage for business interruption services.
  3. Business Owners Policy– This policy is standard for brick and mortar businesses, and covers business property and equipment, loss of income, extra expense, liability, etc. There are certain requirements that the business must meet in order to be eligible for a business owner’s policy. In order to qualify, the business owner will be asked for the underwriting terms of the home, including any updates, as well as the square footage of the designated work space.

For more information, contact McGrath Insurance Group at 800-342-3859 or visit our website at www.mcgrathinsurance.com.

*This article is written for informational purposes only and should not be construed as providing legal advice.