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Insurance and the Homebased business

By Maesz

If you’re starting a homebased business, don’t assume your homeowners (or renters) coverage is sufficient to cover any mishaps. Insuring your homebased business is crucial to protecting both your business, your home and any other assets you might have.

A homebased business needs all the same insurance as a retail space, a commercial office, a warehouse or any place of business. While most homeowners policies cover a limited amount of business equipment, it very well could be that what you have is worth more than your policy’s limits.

So what kind of coverage do you need? Cover the following:

  • Equipment: This includes everything you use to operate your business (computers, copiers, printers, telephones, etc.) plus any other equipment (woodworking, catering, general hand tools) used to provide products and services.
  • Inventory: This includes the products you sell and, if you do any of the “manufacturing”—assembly, sewing, cooking, etc, the materials used to make them.
  • Liability: Base your liability coverage on potential risks. Do you need professional liability; errors and omissions coverage; liquor liability (for party planners, caterers, etc.); off-premises liability (for working at another location); or, if you produce a valuable item, product/completed operations coverage (for your product/work after it’s done)?
  • Vehicles: Any vehicle used for business must be insured, even if it’s personally owned. If you take possession of your customers’ property for any reason, it, too, should be insured while in your custody.
  • Workers’ compensation: If you have employees, you need the appropriate coverage as required by your state—and proof thereof.
  • Fidelity bond: If you (or your employees) perform work in customers’ homes, a third-party fidelity bond will pay for losses due to fraudulent acts such as theft. (Particularly useful for contractors, party planners, caterers, etc.)

Be sure you choose an agent who understands your type of business and has access to a variety of homebased-business insurance products. Make this process a startup priority. If your carrier doesn’t know you have a homebased business, in the event of a claim, there’s a good chance your homeowners policy could be canceled.

Ask questions of your agent. If the answers are not satisfactory, choose another agent and even another, if necessary, to get the coverage you need. Someone can help you.

small biz rural entrepreneurship insurance

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  • About the Author
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About Maesz

Glenna Mae Hendricks. She is an entrepreneur and income tax consultant, so we get lots of good tax tips from her. She is an oenophile (“look that up in your Funk and Wagnall’s,” she says), and a wine enjoyment teacher/guide who also writes wine notes at the Allen’s Retail Liquors site. Her political thoughts (and occasional outbursts of domesticity) appear at Old Feminist and Wild-eyed Liberal.
  • Four Things to Know about Taxes and Starting a Business - November 14, 2017
  • You probably should be making estimated tax payments to the IRS - November 7, 2017
  • 2015 Standard Mileage Rates from the IRS - December 23, 2014
  • Deducting your home office – webinar Wednesday - September 8, 2014
  • Webinars on hiring independent contractors and avoiding common tax mistakes - April 30, 2014
  • IRS? There’s an app for that - February 12, 2014
  • IRS Tax Calendar for Small Business and Self-Employed - December 31, 2013
  • 2014 Standard Mileage Rates for Business, Medical and Moving Announced - December 7, 2013
  • Where can you find answers on the Affordable Care Act? The IRS - August 21, 2013
  • Avoiding the Top Tax Mistakes - June 13, 2013

July 17, 2006 Filed Under: rural Tagged With: maesz

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Comments

  1. Becky McCray says

    July 17, 2006 at 3:37 pm

    Maesz is on a roll today! Two great items!

  2. Becky McCray says

    July 18, 2006 at 8:14 pm

    Over at USA Today, Jim Hopkins quotes Maesz in his Small Business Connection blog. My Mom is famous!

  3. OkieJ says

    July 18, 2006 at 9:38 pm

    thanks for this Maesz! It’s something that really needs to be shouted from the roof-tops! You have no idea (well maybe you do!) how many times I say this to clients who totally ignore me!

Trackbacks

  1. Joining Grasshopper New Media says:
    May 10, 2013 at 5:20 am

    […] no less of a publication than USA Today, Jim Hopkins quotes Maesz’ insurance article in his Small Business Connection […]

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