May 15th, 2015
With the digital age, the concept of keeping work and home separate is increasingly disappearing. Employees often telecommute for their job and business owners are more comfortable with the idea of running their company from home. However, with any business, owners must ensure they have the right insurance coverage to protect their companies' assets. Before selecting policies specifically for business, owners should see whether their home insurance can pull double duty to cover their property and company. Homeowners can get coverage for their personal home and company to protect themselves from financial losses in case of an incident.
Here are four things for home-based business owners to consider when choosing homeowners insurance:
1. Whether the business is allowed for the home insurance policy
According to Allstate, some businesses may be considered in violation of an insurance company's policy terms. Research whether coverage is available first before purchasing insurance and for the kinds of assets that need protection.
2. Restrictions for business equipment coverage
Another factor to keep in mind is whether there are limits for coverage for business equipment. Business owners will likely have to store computers, other electronics and maybe even inventory in their home. Check to see that these items are covered and if there are restrictions for what falls under the policy.
3. If additional coverage is necessary
If owners are unable to cover all of the potential damage to business equipment, they should consider purchasing a business owner's policy. A BOP provides coverage for a variety of assets and liabilities, from inventory to malpractice claims, according to Allstate. This kind of policy is ideal for small or mid-sized businesses that operate from home and also covers company data - a valuable commodity now that data breaches are becoming more common.
Bankrate highlighted one low-cost option for owners running a home business: a business endorsement. Depending on the insurance company, homeowners could add a business endorsement on their home insurance, which may cover thousands of dollars of equipment.
4. Consider commercial package policies
For types of businesses that need further coverage, they could look into commercial package policies, according to Bankrate. These may cover workers compensation in case of occupational injuries or illnesses, which is important if the company deals with hazardous work.
With these tips, homeowners can find themselves fully covered in case of a disaster.
CoverHound offers online search tools to find home insurance for home-based businesses.