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Insurance for Home Based Businesses

By Compuquotes Team on March 27th, 2008
Business Insurance

If you run a business out of your home, you may not be able to count on your homeowners insurance to cover your needs as a business owner. Items that you use for business may be specifically excluded from your home insurance, or your policies just may not carry enough coverage for the value of your business equipment. In addition, you may find that your homeowner policy doesn't cover you for liabilities if a client or employee is injured in your home. Purchasing home business insurance is a wise business move for anyone who makes money from home, but it's vital for some businesses. Here are some of the coverage issues you might have in various home based businesses.

Home Day Care
In some states, you are required to carry liability insurance for your business if you provide home day care for other people's children. In others, you either must carry insurance or inform parents that you don't. In any case, liability coverage is an absolute must for your own protection. It will pay medical expenses and damages arising from injuries that happened in your home while you were caring for a child. You may be able to purchase insurance as a rider on your homeowner policy, or you may have to purchase a separate commercial policy.

Work at Home Professional
If you are a working professional who works from home doing accounting, tutoring, desktop publishing or any other service oriented profession, your homeowner insurance may not cover the cost of replacing your office and professional equipment. Most insurance policies limit the coverage of office equipment to $2,500, and some specifically exclude equipment that is used as part of a business. If there is equipment that you need in order to run your business - a specialized printer, a piano, a sewing machine - a special rider may get it replaced immediately or provide for a loaner/rental while you wait for its replacement.

In addition, if your at home work increases traffic in your home because clients are coming to your house for business reasons, you may need additional liability coverage to pay out in case one of them is injured on your premises.

Home Crafting Business
If you are a crafter working out of your home or have a home studio, your crafting equipment and inventory of supplies probably represents a considerable investment. Your homeowner policy may seriously limit the amount of reimbursement you'll receive for the loss of crafting equipment and inventory/supplies. Consider a rider to cover replacement costs of specialized equipment and supplies.

Direct Sales
If you do direct sales - Avon, Tupperware, lingerie, home d��cor - either door to door or through parties, chances are that you often have several hundred to several thousand dollars worth of inventory in your home, either as samples or as orders waiting for delivery. That inventory may not be covered under your homeowner policy. To be on the safe side, talk to your insurance agent about a special rider to cover the cost of any inventory losses due to covered events.

Additional Automobile Coverage
If you use your car for business purposes, to deliver merchandise for instance, or to transport clients, you may need additional liability insurance. Check with your insurance agent about a rider to cover merchandise in your car and additional liability insurance if you ever transport clients. Keep in mind that clients include children you may care for in your home.

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