Insurance Advisor at Oliver L.E. Soden Agency, Inc

Do You Need Insurance for Your Home Business?

Operating a home-based business has many advantages, which is why more Americans are going this route. Between less commute time, a deduction on income taxes and convenient working hours, starting a home business presents opportunities to make money while enjoying freedom and flexibility. What many business entrepreneurs forget in the excitement of becoming their own boss is business insurance.


According to the Independent Insurance Agents & Brokers of America, 61% of home-based businesses do not have the appropriate insurance. Part of this is purely confusion on the business owner’s part. Some people think that their business is covered under their homeowners or renters policy. If the business is in the home, it would make sense. However, the reality is that a homeowners policy offers little to no coverage for a home-based company.


3 Types of In-Home Business Insurance


If you’re doing business at home, it’s a good idea to have business insurance. If a customer comes to your home and gets hurt, a business insurance policy will cover the medical costs. Let’s look at the different insurance types available and which one is right for your business.


1. Rider to Your Current Homeowners Policy


A rider to your current homeowners or renters policy is the least expensive option. This is a good thing to have if your business is small and you don’t have a lot of risk, such as inexpensive equipment and low traffic from business-related visitors. The cost of a rider is minimal, usually around $100 a year. At this cost, you get around $2,500 in additional coverage.


2. In-Home Business Policy


The next option is an in-home business policy that is issued by a home insurer or specialty firm. This policy is best for serious home-based businesses that have expensive equipment and moderate traffic from customers. The policy covers various contingencies, including a loss of important documents and theft. The cost of this insurance usually runs between $250-$500 a year, providing about $10,000 in losses.


3. Business Owner’s Policy


If you need more than $10,000 worth in coverage, a business owner’s policy is the way to go. This is the most comprehensive policy of them all, and it’s what physical retailers rely on when they need insurance. Many circumstances are covered under this policy, including loss of business equipment, loss of critical records and professional liability claims. Some policies will even cover you while driving a business vehicle.


Business insurance can be tricky, but it’s often a necessity if you are running a home-based business. For a low cost, you can protect yourself and your company. Call Hal Soden to discuss affordable business insurance options.