Home Based Business

• Home Business can mean BIG problems

  13 Oct 2010 by David / No Comments

  So here is the common question:

  I’m running a small business from my home. Is my computer and office equipment covered?

  Answer: is NO The bigger problem is the MISSING liability protection from the insurance company.

  If you run a business out of your home, you should be insured separately. Examples: hair salon, day care or construction business poses greater potential liability and requires a separate business insurance policy. Even a low key consulting business which receive packages in the mail can have exposures.

  Home insurance policies do not cover structures used for business purposes. So if you are operating your business out of a renovated carriage house on the back of your property, you might be out of luck if it burns down.

  Business personal property coverage in home insurance policies usually is limited to $2,500 for on-premise protection and $250 away from your home. So, if you take your laptop to a client’s office, make sure it does not get lost or damaged.

  Most home insurance policies provide no coverage for business data. That means if there is a fire and you lose all your books, files and software, there’s no insurance compensation.

  You are not covered if someone visits your house for business reasons and sustains an injury. Likewise, you are not covered if you cause the injury of someone else during the course of doing business. I have over the years seen this exclusion applied and it can be devastating to the home owner. Just think about it, you pay all the fees for the legal battle just to prove you are not liable. Even worst, if you lose your fight you then pay the judgment.

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