If you work in a home-based business, you may not realize that you need business property insurance coverage. After all, you have homeowners insurance, right? Your business assets may not seem to amount to much either. So, why should you be certain you carry this coverage? Here are a few key reasons.
1. Homeowners Insurance May Not Apply
Homeowners insurance generally doesn't extend to expenses involved in business activities. While it may pay to restore the structure of your home office room, it is unlikely to pay for computers, technology, and mobile devices used for business purposes. In addition, you won't have sufficient coverage for inventory, business record reconstruction, specialty tools, and loss of income during rebuilding.
Many home business owners think that the insurance company won't know that these are business assets, but don't count on this. Insurance carriers are financially motivated to recognize home-based business connections and make you prove your claims are residential if any questions arise.
2. You Do Still Have Visitors
Even though you may run your small operation alone most of the time, you do likely still have some business guests. This might include the delivery drivers who bring packages to your business. Customers may sometimes come to meet, buy, or return items. You may meet with potential vendors or other small business owners. And at busy times, you might need to hire someone to help out.
Keep track of how many non-household members spend any time on your premises over a period of one to six months. The number might surprise you. All these individuals could be the source of an expensive lawsuit if they trip and fall, if a staircase or walkway breaks, or if a tree limb falls on their car on a windy day.
3. Property Insurance Is Inexpensive
The good news is that you can usually get property insurance that fits your limited needs for a low price. Once you assess the actual cost of replacing business property, you will likely find that this element is inexpensive to cover. While the bigger portion is likely to be the liability coverage for injuries and damage to others, you won't need to carry excess amounts if you rarely have business visitors.
To further save money, property insurance can often be bundled with other coverage, such as business vehicle policies or even your homeowner's package. Or you can purchase a business owner policy that has a variety of small insurance policies designed specifically for small business owners.
If you aren't sure whether or not your business is covered in the event of an accident or disaster, take a moment to meet with a business insurance agent in your area. It will bring peace of mind and protect your investment so you can focus on building your enterprise.