Slavsky Mortgage

Is your home-based business really protected?

Who are you? And what do you do? Are you employed? Do you have your own business? Do you have to wear a suit and a tie to your office? Do you work in your pajamas and slippers in the privacy of your own home?

Whether you have a home based office, babysit, have a weekly garage sale or simply keep your landscaping equipment, used year round - this article is for you. You, probably, thought that you are covered by your homeowner’s insurance. Unfortunately, since it is designed for the residence – not for business personal property, the coverage is very limited (about $2,500 at home and $250 away, although it may differ). It may be ok if you never take more than $250 worth of business items off-premise. Also if you are employed, check if the company can cover your business property.

There are other exclusions from homeowner’s insurance, which you cannot afford to overlook. You need to have coverage for injuries and property damage you cause (to yourself or someone else) in any way related to business. If you are sued – the money are going strait out of your own pocket.

You still can use homeowner’s insurance to cover your home based business. Here are a few tips on making smart decisions:
- Increase your business property on-premises coverage, if you have more than it is protected by homeowner’s policy;
- Some home insurance companies offer an option to buy a higher limit for the business property you take off-premises (although, it may be expensive);
- Schedule a laptop. Since computers get easily damaged, it is wise to have a business-use endorsement, as well as Special perils coverage. You’ll pay about $15 dollars a year to insure a $3,000 laptop (without deductibles!). You can also cover lost data by purchasing an optional data coverage;
- To cover the injuries you cause to someone you’ll need the business pursuits’ endorsement (about $5 a year!);
- Consider incidental office liability endorsement (about $10-25 a year), which may include extra coverage on business furniture and equipment;
- Garage sale lovers, if you do not want to pay for defense in case someone gets electrocuted by your old radiator – either buy a small business policy for at least $300 a year or have your homeowners insurance company state in writing they will not exclude your garage sale coverage;
- If you babysit at your or other people’s home you should be protected by childcare liability insurance. You can get it from homeowners insurance company as an endorsement; as a small business policy from insurance agent; from a state office that gives childcare licenses; or from an association of childcare providers;
- Have your insurance company state in writing that they will not exclude your kid’s business activities, like babysitting or dog walking.

Call your insurance agent now and do not put yourself in danger of being unprotected. Sometimes we do not understand that by not buying the right coverage or going without it at all, we are not saving any money. We are actually risking so much (in some cases everything) for so little. Do not ruin your cozy home-based business, your reputation and life. Deal with your gaps. And pursue your happiness.