How To: Insure Your Homebased Business.

Types Of Coverage

Many homebased business owners can get an endorsement, or added coverage, on their existing policies.

Hanover Insurance Co., based in Worcester, Massachusetts, recently introduced The Home Entrepreneur Program, which covers its homeowners policyholders' homebased businesses in 15 states. For an extra $225 annually, the endorsement covers business property up to half the total policy value, $500,000 general liability and business interruption for up to a year.

CNA, based in Chicago, offers a HomeWork endorsement for homeowners policyholders in 33 states. For an extra $175 per year, CNA offers many of the same features Hanover does, plus product liability coverage for items made or sold in the home and $10,000 in accounts receivable coverage.

If your insurance company doesn't offer a homebased business endorsement, look for a separate business owners policy, such as the In-Home Business Policy offered by RLI Insurance Co. in Peoria, Illinois. It provides up to $50,000 in business property coverage, general liability coverage up to $1 million, loss of business income replacement for up to a year, and up to $5,000 in medical payments to customers injured at your homebased business. Premiums start at $150 per year.

Many homebased business owners just want insurance for business equipment. Safeware, The Insurance Agency Inc., in Columbus, Ohio, specializes in such policies. For $69 per year, Safeware covers $5,000 in hardware, software and peripherals for power surges, theft, fire, natural disasters and even accidental damage.

As homebased business continues to grow, homebased business insurance will likely become more widely available and affordable. Don't wait until it's too late to insure your business. You've spent a lot of time, money and effort building your new venture. Shouldn't you spend a little time, money and effort to protect it?

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This article was originally published in the May 1998 print edition of Entrepreneur with the headline: How To: Insure Your Homebased Business..

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