Is Your Home Business Properly Insured?

A business liability claim could prove a nightmare if the proper wording or rider isn’t on your policy.

From the Portland Press Herald…

Many homeowner policies provide only $2,500 of business personal property coverage at your house and $250 away from your premises. That will barely cover your desk, file cabinet and computer.

If you are using a garage that’s separate from your house for storage or any other business operation, you may be subject to a broad policy exclusion that excludes all coverage for that building.

Your home insurance provides no coverage for business interruption – payment for the lost profits and continuing expenses during the time it takes you to rebuild your business after a fire, windstorm or other insured loss.

Business liability incidents are also excluded by most home policies. A client visiting your home or an injury you cause would not be covered. There is no product liability insurance in a homeowner’s policy. Personal umbrella insurance offers no business coverage either.

The solution lies in a conversation with your insurance agent. Some insurers offer a rider that can be added to your home insurance policy. You may need to purchase a separate business insurance policy. Consider using the same insurance company for both your personal and business liability coverage to avoid problems at the time of a claim.

If you are a telecommuter or use a home office in addition to a business location, make sure your home is a part of the liability insurance purchased by your employer. Another question to ask is, will your employer’s property insurer pay for damage to property you own that’s used in the business?

Many home business owners are adequately covered by a personal auto policy.

Using the family car to run to the office supply store isn’t a coverage problem for most insurance companies. If you make deliveries or use a pickup or van, you may need to buy a commercial auto policy. Talk with your insurance agent if you make deliveries, carry people for a fee or if your business use of the vehicle is more than 20 percent of your total milage.

Buy the offered coverage when renting a car from Hertz, Avis or other short-term rental companies. Their contracts make claims a nightmare and include obligations not normally covered by standard auto insurance.