a man in need of insurance for his home based business

It’s hard to know where to start when you want to protect your home based business well. You want ample coverage, but you also want to minimize costs. Insurance experts agree you should address these three categories first.

Business Property

You may own thousands of dollars of computer equipment if you’re a graphic designer, web developer, or architect. If you’re a photographer working from home, you could own pricey cameras, lenses, lighting, and more.

Unfortunately, in almost all cases a homeowner’s insurance policy won’t protect you well. Most home insurance policies have very low limits (typically around $2,500) for business property.

Liability Risk

If clients visit your business, they could hurt themselves on your property. Your homeowner’s insurance policy probably provides little, or no coverage if they decide to sue.

A home based business that sells products or services is also susceptible to lawsuits if a business or individual claims you caused them physical or financial harm. Even if the court rules in your favor, you’ll bear the burden of court costs and legal fees.

Industry Risk

People operate home based businesses in countless industries, so it’s important you buy coverage to suit your company’s specific risks.

For instance, a financial planner, lawyer, or acupuncturist may need professional liability insurance. It protects them from the financial implications when a client claims their advice lead to damage or loss.

Insurance Options

Generally, you’ll have three insurance options for a home based business, but it is important you carry business insurance. If you don’t tell your insurer and damage or loss occurs due to a business activity, they may deny a homeowner’s insurance claim and cancel your policy, too.

Homeowner’s Endorsement

If you operate a very small home based business, adding an endorsement to your homeowner’s insurance policy may protect you. However, most endorsements only cover a home business when they earn less than $5,000 a year.

Home Business Policy

A home based business insurance policy offers a higher level of protection and reasonable premiums. Typically, it provides liability and property coverage and sometimes lost income compensation if you can’t operate your business due to damage caused by a covered event.

Most policies cover up to $10,000 for property and between $300,000 and $1 million for liability.

Business Owner’s Policy

If you operate a thriving home based business which generates substantial revenue and clients visit your home, a business owner’s policy offers the protection you need. Examples include accountants, daycares, and tattoo studios.

A business owner’s policy can cover a business that earns up to $3 million in sales. Plus, it protects your equipment and reimburses you for the costs associated with a liability lawsuit.

Seek Professional Advice

Buying a generic business insurance policy won’t protect you. You need a policy tailored to your specific needs. Rates and coverage vary depending on whether you operate full-time or part-time, how much revenue you generate, and industry and liability risk.

We can tell you whether you need commercial auto insurance if your personal auto insurance policy does not provide adequate protection and help you with workers’ compensation insurance if you employ others.

Meet with an independent insurance at Phil Richard Insurance instead of trying to go it alone. We’ll protect your interests and find the most suitable and affordable products to meet your needs.