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Home-Based Small Business Insurance

There are a lot of small businesses out there.  Not all of them are run from a commercial area.  Some are home-based small businesses.  What many people don’t consider is insurance for a home-based business.  To determine what you need, you need to consider the following:

  • Do clients visit your home office?
  • What type of business you run?
  • What is the is the value of your business property?
  • Do you have employees?
  • Do you use your car for business purposes?
  • Does your computer/cloud service store client financial and personal information?

If the answer to any of those questions is yes, you should consider extra coverage in addition to your current home/auto policies.

Coverage Options

When considering whether you need additional insurance for your home office, you need to realize that your current policy for your home may not cover business damages.  You do have options to choose from that will help with that:

Homeowner’s Endorsements –

Endorsements will expand the scope of your coverage provided for business property.  The Home Business endorsement extends a policy to cover a business owned by the policyholder.

Business Owner’s Policy (BOP) –

This is a package policy that consists of both commercial property and general liability coverage in a single policy.

Stand-Alone Home-Based Business Policy –

Stand-alone policies allow you to cover commercial property and/or general liability.  The property policy will protect furnishings and equipment, while the general liability protects your business from third-party claims or suits.

Worker’s Compensation Coverage –

If your home-based small business has employees, you will need to have coverage should they be injured on the job.

Commercial Auto Policy –

If all you have right now for any car that you use for your business is your personal auto coverage, they only cover limited use of your car for business purposes.  If you rely on your vehicle heavily for your business, then you should consider business vehicle insurance.

Policy Customization

Every business in existence does different things, sells different products and/or services. Therefore, every business and their insurance needs are different.  So, what we’re going to do is give you examples of different businesses and their potential insurance needs so you have an idea of how different a commercial policy can be from business to business.

First up: Retail.

An example policy for a retail business may look something like this:

  • General Liability Coverage
  • Business Owner’s Insurance
  •                 Equipment Breakdown
  •                 Buildings and Contents
  •                 Business Income and Extra Expense
  •                 Products and Completed Operations
  •                 Electronic Data
  •                 Newly Acquired or Constructed Business
  •                 Employee Dishonesty Coverage
  • Commercial Auto Coverage
  • Workers Compensation Coverage

Next Up: Contractors

Here are some components that might be found in a contractor policy:

  • General Liability Coverage
  • Business Owner’s Policy
  • Professional Liability for Builders
  • Commercial Auto for Builders
  • Workers Compensation for Builders
  • Surety Bond

Finally: Office

Here’s what an Office policy might consist of:

  • General Liability Coverage
  •                 Premises Liability
  •                 Products Liability
  •                 Completed Operations
  • Business Owner’s Policy
  •                 Buildings and Contents
  •                 Business Income and Extra Expense
  •                 Electronic Data
  •                 Newly Acquired or Constructed Buildings
  •                 Employee Dishonesty Coverage
  • Commercial Auto Coverage
  • Worker’s Compensation Coverage
  • Commercial Umbrella Coverage

Even though there are some aspects of each policy that are similar, as you can see there are ways to tailor a commercial policy to each business.  Do you need to know more about commercial insurance options?  Feel free to contact us, we can help you find answers to any questions you might have.

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Bill Abbott has found that 43% of other clients are overpaying for their insurance and 26% have missing coverages.
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