Many people wrongly assume that if they start a home based business their homeowner's insurance policy will cover them in the event of a problem. This is not always the case. It is important to look into all of the ins and outs of insuring a home based business before you start one so you will not be left in a bad way if a problem arises, such as your computer is stolen or there is a fire in your home office.
First thing you must do to avoid unsettling surprises in the future is to have a talk with your insurance broker and let him or her know of your plans to start a home based business. In most instances it is not a costly affair to add riders for your business onto your pre-existing homeowner's policy in order to cover you for any ordinary risks that you are taking in starting a new business. Make sure to find out if it is necessary to purchase separate insurance policies for a variety of types of business coverage because not everyone's insurance needs for their business are identical.
Take a cryptic look at all of your business equipment as well as furnishings such as your desk and chairs, etc. and carefully evaluate what it would cost you to replace these items in the event of a break in, a fire, a flood or any other type of disastrous situation. Include every single item on your list, even down to the software on your computer and your mouse and mouse pad. Choose the highest deductible possible when insuring all of your property and ensure that the insurance coverage is for the complete replacement cost of all items and not the depreciated value of the items.
You will need to have liability insurance for customers or clients who come to your home. This even includes the mailman and the UPS delivery person. Accidents can happen, such as a person slipping on ice in your driveway in the winter months so be prepared by getting insurance to protect yourself. The homeowner's insurance you have is likely to protect you in the event that a family member, friend or social visitor gets hurt but it is not likely to include anyone who comes by who is in any way connected to your home based business.
Different types of home based businesses require different kinds of insurance. For example if you are in the business of selling professional services such as running an accounting business from home then it will be necessary for you to obtain professional liability insurance. On the other hand, product liability insurance is essential if you make, distribute and/or sell any type of products. If one of your products causes injury to someone who threatens to sue, you will be glad that you invested in this type of insurance. If you plan to hire people to help you run your business then worker's compensation insurance coverage is a must.
If your business will take you away from home on occasion then make sure that your car insurance adequately covers you for any injuries you might sustain in relation to your business dealings. While you are at it find out how far your general liability coverage reaches. This type of coverage will come in handy if you accidentally cause injury to someone or damage someone's property while you are away from home conducting business. In some cases you may need to purchase a special policy or a rider to protect you. Some insurance companies offer these types of riders for a cost of $200 or less.