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Homebased Business Insurance

Business is booming, sales are up and everything is just right...except for one little detail. Have you examined your business insurance policy lately?

According to Jeanne Salvatore at the Insurance Information Institute, a nonprofit communications organization in New York City, you should consider updating your policy whenever you make a change in your business.

"If you buy new equipment, even something as simple as a laptop computer, you should immediately contact your agent to make sure you are covered," says Salvatore.

The type and amount of coverage you need depends on your business, Salvatore adds. If you have a simple, part-time business, you might want to get minimal coverage by adding endorsements for specific equipment onto your current homeowners' policy. To get additional coverage, you should buy a separate business owner's policy.

The option that gives you the most coverage for the least cost is a "homework" policy. This combines the homeowner and standard business-owner policies into one entity, eliminating some of the coverage duplication you might have if you buy two separate policies. For example, in some states, both homeowner and business-owner policies include structure insurance; if you buy both, you are paying for the same coverage twice. Unfortunately, the homework insurance option is not offered in all states nor for all businesses. To see if this is an option for you, call your state insurance office or the National Insurance Consumer Helpline at (800) 942-4242.

"Once a year, evaluate your insurance needs," Salvatore suggests. Changes that might require additional insurance include hiring an employee, buying new furniture or equipment, or having messengers coming in and out of your home.

Sales growth also increases the need for coverage, as does a loss of business income. "This is especially important for a home business," says Salvatore. "You want to make sure you can still make a living if a disaster [strikes] your home."

The Insurance Information Institute offers a free booklet, How to Insure Your Homebased Business; to obtain a copy, send a legal-sized self-addressed envelope with 32 cents postage to 110 William St., New York, NY 10038. You can also access the institute on the Internet: http://www.III.org

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