- Business Advocacy
More than half of America's businesses are home-based, according to the U.S. Small Business Administration. But setting up headquarters in your home doesn't mean your homeowners insurance will adequately protect your operation.
A typical homeowners policy provides about $2,500 of coverage. That usually will cover equipment — but it won't offer liability protection or cover you for lost data or income.
Do your research to protect yourself and your home business. An important thing for any business owner to do when starting out is to create a business plan. That includes having the right type and amount of insurance coverage. Here are three options to consider when insuring your home-based business.
Your homeowners policy may cover up to $1,500 worth of personal property, such as a desk or merchandise held as samples, e.g., Mary Kay Cosmetics. This coverage protects business property while it’s used or stored inside your home. The policy may also offer up to $750 worth of coverage for your business property while it’s away from your home. If your home-based business is small, this might be enough coverage. If not, you have the option to increase those coverage amounts with a homeowners policy endorsement.
You might consider adding a homeowners policy endorsement to your existing coverage if you:
An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. These policies, which may also be called in-home business endorsements, vary significantly depending on the insurer.
While your homeowners insurance policy might come with liability protection for certain incidents that happen inside your home, it does not extend to home-based, business-related activities. For example, if a customer comes to your home to exchange payment for goods or services and suffers an injury, there may not be coverage under your homeowners policy. Coverage gaps can easily be fixed with a business insurance policy.
You might consider a business insurance policy if you:
Being a savvy home-business owner is about more than having the right insurance for your business. Other factors to consider include:
For more information, contact State Farm Agent Regina Talbot at 626-357-3401.