Does My Homeowner’s Insurance Cover My Home Business?

Many American’s today are relying on their talents and special skills to make ends meet, a phenomena we are seeing more and more as unemployment rates continue to rise. The decision to start a home-based business is one that most people did not make lightly. Many families today are being supported on the income generated from these types of businesses solely.

If you are one of these entrepreneurs that decided to risk starting your own home based business, you may have overlooked one risk factor that could make or break your business, and your family’s well being, in the event of theft or fire. Insurance. Every homeowner has some sort of insurance policy, and it is very easy to assume that because your business is in your home that your business assets are covered under the blanket of “possessions” covered in your insurance policy. Sadly, in many cases this is not true.

The same goes for liability insurance. Your insurance policy will most likely cover hospital bills if a child spending the night at your home falls and breaks an arm, but if a client comes into your home for business purposes and breaks his or her arm, the same hospital bills would likely be denied.

If you own a home based business it is very important that you check with your insurance agent, as each company will have different ways of handling home businesses. Some may cover electronic equipment that would normally be found in a home without a business, such as computers, televisions and office furniture. But most will not cover things like inventory or equipment specific to your type of business that a general homeowner would not own.

The line between a home business and a home is very blurred at times. Only someone from your insurance company can explain to you the specifics of your current policy. Before you call, be sure to look over your current policy and see if it has specific clauses about business activities and business supplies. If it does not clearly explain what is and is not covered, double-checking with your agent is the best bet.

If you find that your insurance coverage does not give you the business protection you need, see if your current insurance company offers the add ons that will be necessary to ensure you are protected. Often by bundling these add ones with your current policy you will save more than if you purchased insurance from a company that specializes in insuring businesses. But like any type of insurance, be sure you do get some quotes from other companies before you sign any plans. All it takes is one accident that the insurance company can blame on your business and you can find yourself at the receiving end of a lawsuit that costs you all you have worked so hard to achieve.