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Karl Newman, President
Darrin Sanger, Communications Director

NW Insurance Council    
Phone: (206) 624-3330
Fax: (206) 624-1975

Dollars and sense: insure your home-based business properly

SEATTLE - Many Americans are making a living from the comfort of their own homes as more and more entrepreneurs seek both profitability and convenience.

Most of the more than 11 million home-based businesses in the U.S. do not have the proper insurance coverage, according to the Insurance Information Institute (III).

A big misconception for home-based business owners is that their homeowners insurance will cover their businesses in the event of a burglary, fire or windstorm.

"Most Homeowners policies have limited coverage for home-based businesses," said Karl Newman, president of the NW Insurance Council. "It's important to know what is and isn't covered and to be sure you've chosen the right amount of property and liability coverage."

Typically, homeowners policies provide only $2,500 of coverage for business equipment such as computers, fax machines, printers and PDAs. You may also need coverage for liability and lost income if your home experiences a loss that affects your business.

The NW Insurance Council and III offer the following tips to help you better insure your home business:

  • Purchase a homeowners policy endorsement. You may be able to add a simple endorsement or rider to your existing homeowners policy to double your standard coverage. For as little as $25, you can raise the policy limits for business equipment from $2,500 to $5,000.
  • Purchase an In-home Business Policy. This provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. Many insurance companies offer comprehensive insurance policies specifically tailored to the small business. The average home-business insurance policy can run about $250 to $400 for about $10,000 worth of coverage.
  • Purchase a Business Owners Policy (BOP). Like the in-home business policy, a BOP covers business property and equipment, loss of income, extra expense and liability. These coverages are on a much broader scale than the in-home business policy. As with any insurance policy, a safer work environment will result in lower property premiums.

For more information on how to insure your home business, visit the NW Insurance Council website at www.NW Insurance

Call for our free brochures titled Insuring Your Home Business and Insurance For Business Owners at (800) 664-4942 or e-mail your request to info@NW Insurance

The NW Insurance Council is a nonprofit, consumer-education organization funded by member insurance companies.