| If you're
working at home -- STOP-- and review your
insurance coverage. Your homeowners insurance
probably doesn't cover your business. A typical
homeowners policy provides only $2,500 coverage
for business equipment which is usually not
enough to cover all of the business property. You
also need coverage for liability and business
interruption. To
insure your business, you have three
choices--endorsements to the homeowners policy,
an in-home business policy or a small businessowners package policy.
1-ENDORSEMENTS
Depending on the type of
business you operate, you may be able to add an
endorsement to your existing homeowners policy.
For as little as $14 a year, you can double your
standard homeowners policy limits for business
equipment from $2,500 to $5,000.
Some companies have begun
offering endorsements that include property and
limited business liability coverage. Endorsements
are typically only available for businesses that
generate $5,000 or less in annual receipts. They
are available in most states.
2-IN-HOME
BUSINESS POLICY
The insurance industry has
responded to the growing number of home-based
businesses by creating in-home business insurance
policies. For about $200 per year you can insure
your business property for $10,000. General
liability coverage is also included in the
policy. A business owner can purchase anywhere
from $300,000 to $1 million worth of liability
coverage. The cost of the liability coverage will
depend on the amount purchased.
If your business is unable
to operate because of damage to your house, your
in-home business policy will cover lost income
and ongoing expenses such as payroll for up to
one year. The policy also provides limited
coverage for loss of valuable papers and records,
accounts receivable, off-site business property
and use of equipment.
In some cases, the
companies that offer these policies require that
you purchase your homeowners and auto policies
from them.
3-BUSINESSOWNERS
PACKAGE POLICY (BOP)
Created specifically for
small businesses, this policy is an excellent
solution if your home-based business operates in
more than one location or manufactures products
outside the workplace. A BOP, like the in-home
business policy, covers business property and
equipment, loss of income and extra expenses, and
liability. However, these coverages are on a much
broader scale than the in-home business policy.
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