Starting A Home Based Business: Is Your Homeowners Insurance Enough To Cover You?
by Vilma Maki
With the pandemic in full swing, many people are looking for ways to earn money from the comfort and safety of their own homes. For some, this means taking on a remote position with a traditional employer. For others, it means starting up a home-based business of their own. If you fall into this second category, it is important to consider how your insurance needs may change as you get your business up and running.
Current Coverage Limitations
Most homeowners insurance policies will include some very basic coverage for business-related equipment or inventory that is stored in your home. Consequently, if your business does not require you to maintain a full on-site inventory or require much in the way of office equipment, your standard homeowners' insurance may be enough to cover your needs.
However, it is also important to note that these policies typically do not offer any injury coverage for individuals who get injured while visiting your home for business purposes. So if you plan on seeing customers or clients in your home, you may require additional coverage.
Home Based Business Endorsements
If you find that you are going to need to expand your insurance coverage, one of the ways you can do this is through a home-based business endorsement on your existing policy. These endorsements may also be referred to as riders or add-ons.
A home business endorsement functions as a type of supplemental insurance coverage by increasing policy limits for business-related items. However, these endorsements rarely offer new types of coverage that were not already offered by your homeowners' insurance. For example, a home-based business endorsement will allow you to increase the amount of coverage that is offered for your in-house inventory but will not allow you to add injury coverage for customers who may be hurt when visiting the property.
Home-Based Business Insurance Policies
Unlike endorsements, these policies offer stand-alone coverage for your home business needs. This is extremely important for individuals who plan on having customers on-site or who plan to operate a larger scale business from their home.
While home-based business insurance policies offer comprehensive coverage for your business insurance needs, it is important to note that they are not intended to replace the need for standard homeowners insurance. The good news is, working closely with your current insurance agent may allow you to bundle these two policies and ultimately save you a ton of cash on your monthly premiums. Contact a homeowners' insurance provider for more information.
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About Me
After we purchased our first home, we realized that it might be a good idea to evaluate our insurance coverage. Although we had purchased homeowners insurance before, we had never owned a policy as large as the one we would need for our new place. Also, our new home had a trampoline and a swimming pool, which made us worried about liability. To iron out the details, I decided to meet with our insurance agent. We talked about things like monthly premiums, coverage limits, and deductibles, and it was incredible to learn more about the terminology. This blog is designed to help you with the same types of questions.