When I got my kids a dog, I had no idea that it could affect my homeowners insurance. I happened to run into my insurance agent in the store when I was buying dog food and he asked me what kind of dog we had. When I told him, he said I should stop in the office the next day. I had no idea that things like this could affect premiums, so I started asking what else could do it as well. I created this site to help others understand some of the finer points of homeowners insurance and what they should think about to manage their rates.
If you are starting your own business and have decided to work out of your home, then you have to ensure that you have some insurance coverage. Your home policy isn't likely to give you the protection you need.
These policies are not designed to cover business claims and losses, so you'll have to find a way to cover your gaps here. While some home insurers allow you to add extra coverage, known as endorsements, to give you some business protection, you should consider taking out a home-based small business policy instead.
What are the differences between a home policy endorsement and business coverage? Why should you take out business coverage?
What Is a Home Insurance Endorsement?
While some homeowners insurance policies don't cover business claims, some offer limited benefits. However, the dollar amounts you could get in a claim aren't likely to cover the expense of replacing damaged or stolen computers, equipment, or inventory.
Some insurance companies allow you to add endorsements to your home policy. These endorsements give you some specific business coverage.
So, for example, your insurer might agree to give you a higher limit on equipment claims or special cover for the inventory you store at home. These endorsements become part of your home insurance coverage.
What Is Home-Based Business Insurance?
Home-based business insurance is a stand-alone policy. It is not part of your home insurance coverage.
This insurance protects your business and its activities. So, for example, it will cover damage, theft or loss of equipment, computers, and inventory items. It gives you liability coverage in case someone gets injured when they come to your home on business.
You can also add extra coverage if you need it. For example, if you keep customer data on your computer at home, then you can take out data breach coverage. Or, if you give professional advice, you can take out different kinds of liability coverage to protect you if someone makes a claim against the advice you gave them.
Why Choose Home-Based Business Insurance?
While an endorsement might seem like a quick and cheap way to get business coverage, this option doesn't suit every new business start-up. For example, if you keep a lot of valuable inventory in your home, then the added coverage you get from an endorsement add-on might still not be enough to cover your costs.
Plus, home insurance endorsements don't give you full liability or data-breach coverage. Your new startup is unlikely to survive the costs of a liability or data leak claim without the financial backing of specialized insurance.
So, it makes sense to start off with targeted business coverage. You get all the protection you need.
To find out more, contact a startup insurance broker service and ask about their home-based policies.
Share8 September 2022
