Doing business of any kind from home comes with some insurance considerations. Many home insurance policies will not cover anything that has to do with business. If you have a home-based business or plan to start one, here are three questions you need to ask concern your home insurance policy.
1. What Does Your Homeowners Policy Cover?
Read over your policy or speak to a representative of your insurance company. Insurance carriers treat home-based businesses differently. By knowing what they allow, and don't allow, you'll have a better overview of what kind of commercial insurance you need to add.
Another, more pressing concern is how your insurance company views home-based businesses in general. Sometimes, business activity of any sort can violate your home insurance policy. So you'll want to know if that's a possibility as well.
Check to see what your policy has to say about business equipment. For example, your home insurance policy covers the items in your home. However, if one of those items, like a printer, has ever seen use for any kind of business purpose, then the insurer may not cover it. This can apply to whole structures as well, such as a garage, or your basement.
2. What Does Your Business Involve?
Many people have home-based businesses and treat them as such. There are also many people who have hobbies or activities they don't see as businesses. Ask yourself these questions:
The truth is, if you're making a profit, or can possibly make a profit, then it's a business. Even if that profit is a single dollar, it's reportable.
It doesn't matter if you're having regular garage sales or getting rid of your old comic book collection, you're still engaging in business activities. Even if you don't see it that way, your home insurer will.
3. What Kind of Protection or Extra Protection Do You Need?
You should now know if your homeowners policy covers anything business related. You also know the ways in which your business can make a profit. Now you have to figure out what kind of commercial insurance package will work best for you.
Speak to your current insurance carrier – For a smaller business, or something you consider a hobby, you should speak to your current insurance carrier. They may allow you to add a rider or endorsement to your current policy. These add-ons will work neatly with your homeowners insurance to protect your business equipment and actions.
Pick up dedicated commercial insurance – If you're doing a little more than selling your romance novel collection piecemeal or collecting and trading coins, you need more robust coverage.
For example, if you use your shed as a wood shop, or run a hair salon out of your garage, you will need far more liability coverage and protection for your equipment. In addition, you will need protection for loss of income if something happens that stalls your business.
If you are running a legitimate business from your home, then you should speak to a commercial insurance carrier. You will need to know what kind of coverage you need for your business. Sometimes it's hard to figure it out on your own. A professional can help point out where you need to apply the protections.
For more information, contact Paris V Mastroddi, Inc or a similar company.
Home insurance can be complicated. How do you know how much coverage you need? How much of a deductible should you set? Does your home insurance cover all of the potential disasters that can happen? Will you get a big enough payout to replace the items that you would lose during a disaster? My blog is loaded with tips and advice that can help you improve your home insurance policy. It is my hope that my personal experience with loss can help you read, understand and improve your personal home insurance policy and avoid the costly mistakes that I had made.