Running your own business from home offers you a chance to be your own boss and have control over your life. But do you know if you have the right coverage in your home insurance for your business? The answer to this question depends largely on what provisions are in your home insurance for a business and whether an endorsement or additional coverage limits are necessary to protect you and your business.
Your home is one of the largest and most important assets you own. The average value of homes in the United States, according to real estate website Zillow.com is nearly $250,000 (through March 31, 2020). Protecting that value against loss due to damage, theft or other qualifying conditions is one of the important reasons you buy home insurance. Protecting your home and its value is important. But also understand the addition of a business in the home increases your liabilities, which may or may not be covered.
Is Your Home Business Covered By Your Home Insurance?
Working from your home makes you one of half (50 percent) of all small businesses in the United States, according to the United States Small Business Administration. Also:
- 50 percent of millennials (those born between 1981 – 1996) in the workforce classify themselves as freelancers and work from home
- 43 percent of United States workforce in in 2016 worked remotely from home
Your home insurance policy may provide coverage for some of the aspects of your home-based business, but not all. Or, the coverage may be inadequate for your needs. Plus, gaps in your coverage may provide minimal protection for business equipment or inventories you keep in the home. This could be potentially devastating to you in the event of damage from a storm or flood or if a theft in the home were to occur. The time to find out if you have adequate protection for your home business from your home insurance provider is before a loss occurs, not after.
Protecting Your Home Business
Taking steps to properly insure your home business requires you to look at your current home insurance policy. You may also consider adding additional riders or endorsements to your coverage that are specific to the home business you are operating. Some of the additional coverages to consider include:
- Replacement coverage option for all business property and equipment you own
- Income loss coverage (this protection may be especially important during a shutdown crisis)
- Coverage for software and computers owned by the business
- Professional liability coverage
This is a small list of the additional items of coverage for your home insurance policy. It is important to consider that the inclusion of any of these endorsements may be a lifesaver in the event a loss happens.
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