Not many years ago, getting proper coverage on a homebased business was challenging and expensive. But insurance companies have now responded to homebased businesses' needs with a variety of flexible products to provide appropriate, affordable coverage. You have three basic options for insurance, says Loretta L. Worters, vice president of the Insurance Information Institute.
First, you can buy an endorsement to your existing homeowners policy. Standard homeowners policies provide minimal coverage (usually about $2,500) for business equipment and include no other business coverage. An endorsement increases your business property coverage, and the cost is nominal.
Second is an in-home business policy, which provides greater comprehensive coverage for business equipment as well as liability. Worters says some in-home business policies also cover such things as important papers and records, business interruptions and the cost of operating out of temporary locations.
Third is a business owners policy (BOP), a policy designed for small to midsize companies. Worters recommends a BOP if you operate in multiple locations or often work at your customers' sites.
Besides property and liability, be sure vehicles and employees are adequately insured. And keep up on what's new from your agent.
Jacquelyn Lynn is a freelance business writer in Orlando, Florida.