It isn’t hard to see why home-based businesses are becoming increasingly popular as time goes on. They’re inexpensive, simple, and have a number of benefits and write-offs that can be taken advantage of come tax season. Unfortunately, recent estimates reveal that most home-based business owners are grossly under-insured – and that’s a big problem.
A lot of people who start these businesses are under the impression that since the business is located within the home, their homeowners insurance policy will cover their business as well. What some unfortunate folks have discovered, though, is that this is not the case. Regardless of the fact that your business is located in the home, separate business insurance coverage is still necessary. Fortunately, there are several affordable policies available for home-based businesses of all sizes.
The most basic form of business insurance for a home-based business is going to be a homeowners insurance rider. These are often the cheapest type of business insurance you can get, and they don’t cover much. The coverage amount will vary, but it typically runs between $2,500 to $5,000. The rider’s primary purpose is to cover equipment and provide a little coverage for liability as well. It will not cover things like loss of income, workers’ comp., or other potential issues.
The next step up in home-based business insurance would be a home office policy. This policy provides the protections listed above as well as protections for lost income, business liability, theft, personal liability and fire. A home office business insurance policy usually won’t cover damaged or lost inventory.
Finally, there is the business owners policy, or BOP. A BOP will provide much greater coverage than a home office policy, including coverage for structures used as offices (garage, guest house, etc.), office equipment and furniture, software and documents, loss of income, advertising and personal injuries such as libel and slander, advertising issues and injuries that occur on the business’ property. As the most comprehensive form of home-based insurance policy, a BOP is also going to be the most expensive.
There are plenty of business insurance options for the home-based business owner to choose from, and the size of your business will indicate which one works best for you. If you have additional questions about business insurance, call Carol at 661-803-3803 or stop by InsuranceSCV.com for a FREE quote!