If a fire swept through your home office or a thief stole the equipment vital to your business, would an insurance company be there to cut a check? Has your data been backed up and safely stored at another location? What if one of your clients fell and got injured on your property? What if you injured yourself?
These are some of the most important questions entrepreneurs need to ask themselves. And yet, insurance is one of the necessities most overlooked by homebased business owners, says Trina Pulliam, a homebased sales trainer and founder of SOHO Station (http://www.sohostation.org), an association for people who work from home. Pulliam recommends entrepreneurs look close to home for the three crucial areas of coverage:
1. Medical: A spouse or parent whose health insurance policy can extend to cover you is the ideal option, Pulliam says. Otherwise, investigate joining your industry trade association or local chamber of commerce; many offer significant savings on health insurance.
2. Business equipment and liability: To insure your equipment and protect your home office against liability if a client is injured on site, contact the company that issued your existing homeowners or renters policy and see if you can purchase a rider on your current policy to provide property and liability coverage. If you're getting new coverage, shop around for a price, since costs vary widely.
3. Data: Backing up data is another form of insurance, says Pulliam, who uses Iomega Zip disks to store hundreds of her business's files.
Pulliam's final insurance recommendation: Make sure you keep a fire extinguisher handy. "It's such a no-brainer and so inexpensive," she says.
The following groups and associations can provide helpful resources for homebased business owners seeking insurance:
The American Home Business Association: (800) 664-2422, http://www.homebusiness.com
Co-op America: (202) 872-5307
Home Business Institute: (888) Dial-HBI, http://www.hbiweb.com
National Association for the Self-Employed: (800) 232-NASE, http://selfemployed.nase.org/nase
Small Business Service Bureau: (800) 343-0939