Insurance for your home-based business is different from other insurance policies because of the wide variety of instances when this type of insurance is needed. Do you need insurance for the business you run out of your own home?
Eric Bossuk, President of Tri County Insurance in Calabasas, California, answers questions regarding this special kind of insurance.
Interview with Eric Bossuk, Home Business Insurance Expert
Why is at-home business insurance necessary?
Home based business owners often have the same property in their home office as those who work in an office space. Property such as computers, desks, printers, faxes, supplies and products are not usually covered by homeowner's insurance policies. Furthermore, there are liability risks that a home based business owner faces if customers visit them at their home office and injure themselves while on the premises that may not be covered by their home insurance.
What type of insurance coverage do at-home business owners need?
Those who run a business from their home will need:
- Coverage for their property
- Liability for their operation
- Professional liability if they are selling a service
Moreover, they should also have a business income policy in the event that their property is destroyed and they cannot conduct their business at home, thereby affecting their income.
How is at-home business insurance different from other types of business insurance?
At-home business insurance really isn't much different from traditional business insurance. It is, however, generally less expensive, as the revenue generated from the business is traditionally less than the revenue generated by a large corporate office.
Do people with at-home businesses need liability insurance?
Absolutely! Home based business owners need liability insurance just as any other business owner. This will protect the business if a visiting customer or client injures themselves while on the premises. Liability will also protect the business if a product sold by the business injures a customer. For those who sell a service (accountant, etc), they should probably opt for professional liability insurance as well.
What at-home businesses might not need insurance?
Any person conducting business from their home should consider purchasing business insurance to protect themselves.
Does homeowner's or renter's insurance cover business property?
Homeowner's or renter's insurance provides coverage for a very small and limited amount of business property on the premises only. If the business has more than $5,000 worth of property or takes property off premises (i.e. on a sales call or exhibit) business insurance will be needed to protect the business. Home based business owners need to be aware that their personal insurance coverages usually do not cover a business. The only way to be sure that all you've worked for is protected is to purchase the proper business insurance.
What should an at-home business owner do when they need to buy insurance?
Ask for referrals for a local, reputable agent. It may save money for an at-home business owner to work with an agent or broker who provides not only their business insurance, but also provides their auto or other insurance coverages. Meet with an agent or multiple agents to discuss options and costs, and select the agent you feel best understands your needs.
Should at-home business owners do comparison shopping when looking for insurance?
All business owners need to feel comfortable with the representative From whom they are purchasing insurance. Comparison shopping isn't a bad idea, but make sure to work with the agent with whom you feel most comfortable. For home based businesses, many will feel most comfortable working with a local agent.
How can at-home business owners know how much coverage they need?
Business owners need to take the time to thoroughly explain the business to an insurance professional and discuss the limits and coverage necessary. This meeting or interview should provide all of the details necessary to properly insure the business.
About Eric Bossuk
Eric Bossuk is the President of Tri County Insurance, based in Calabasas California. Tri County Insurance is one of only eight agencies in California recognized as a Best Practices Agency by the Independent Insurance Agents and Brokers of America. Tri County Insurance provides auto, home, life, business, property and health insurance. For more information visit the The Tri County Insurance website.