For many small businesses just getting their start, it makes the most financial sense to headquarter out of the owner’s home, though it could be a costly mistake to assume your home insurance policy will include coverage for the company.
In most cases, homeowners insurance policies don’t extend protection to out-of-home businesses, and filing a claim for household items and business accouterments could be denied. Knowing your options when investing in small business insurance is important, and the details of a term should be just as important as being offered a low rate for coverage.
Your home insurance provider may offer a business endorsement on your policy. This may be the most cost-effective option, but may not always be available. Despite a low-cost tacked onto your house insurance premium, you may not have professional liability. This is a better coverage option for employees who work out of their home, but limits may prevent adequate claims from being approved.
Another option would be an in-home business policy. These typically offer reimbursement should computer information be lost, and sometimes include minimal liability insurance for businesses. One major downfall is the missing errors and omissions insurance, though it may be available as a separate policy.
A standard business owners policy may provide enough coverage for your at-home business, and is often a policy that can be altered to better fit coverage needs. Most standard policies include general business liability, errors and omissions insurance that is in line with your company’s needs, off premises product liability for those who sell items, compensation for loss of income if reason is covered in perils, and accident protection. The price paid for BOPs can vary, depending on limits set in addition to terms and conditions being chosen.
If more coverage is needed, commercial package policies may need to be purchased, however these offer a large amount of insurance and sometimes include worker’s compensation which your small business may or may not require.
Rather than comparing quotes, terms and conditions through individual providers, you may benefit from first determining how much coverage you need and if you will need to seek an separate provider if not adding onto your home insurance policy via an endorsement.