Insuring Your Small Business

Today I’m going to discuss home based business insurance coverage and what to look for in policy options. No matter how small your business, there are risks to protect against. Insurance is an essential part of protecting a home based business. You can’t always count on a home owners or renter’s policy to cover your small business risks. Adding a rider or endorsement is the least expensive solution but it also offers the least protection for your business. However if you have very few customers or employees, minimal deliveries, little equipment, and no valuable inventory in your home office, add on coverage, might be all you need. Check with your state insurance department or an insurance agent to see if add on coverage to your home owners policy is adequate for your home business.

An in home business owners policy provides more protection by combining home owners and business coverage in one policy.  This typically offers coverage for loss and damaged property, equipment, and records, plus loss of income due to business interruption. These policies might include business interruption coverage which protects your earnings if you can’t operate because of unexpected events such as a fire or power outage. Make sure you check with the

insurance provider to make sure of what is covered in your particular policy. Something else it might include is product liability coverage which protects you against lawsuits from injuries caused by your product or service. The best thing to do is to go over everything that’s covered so you don’t make the mistake of thinking you have coverage for something when you in fact, do not.

A business owner’s policy or (BOP) offers the most comprehensive home based business protection. Business owner’s policies typically protect against losses from property damage, fire, smoke, frozen plumbing or theft, even when you’re travelling with insured items. Business owners policies or (BOP)’s may offer both on and off premises protection for accidents that cause bodily injury or property damage. This could include liability or medical coverage if someone is injured on your property, or someone

else’s items are damaged while doing business with you.  Business owner’s policies include protection from employee, customer, and contractor claims and may shield you from contract or advertising liability including libel or slander claims. Not included in Business owner policies are disability, heath, and workers compensation. Some other types of insurance to consider are data compromise/data breech coverage which protects against legal and other costs if customer data is stolen or released accidentally. You can consider employment practices coverage which protects against employee claims or discrimination and unfair treatment. You can consider director and officers liability coverage which protects against lawsuits claiming mismanagement. Key person coverage insures the life of the owner and key employees. Flood protection for business based in a flood zone requires a separate federal flood insurance policy. You might not need every kind of coverage we have mentioned but it pays to know the ins and outs of business coverage.