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
SEATTLE - Many Americans are making a living from the comfort of
their own homes as more and more entrepreneurs seek both profitability
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
- 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 Councilonline.org/in_hbus.htm.
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 Councilonline.org.
The NW Insurance Council is a nonprofit, consumer-education organization
funded by member insurance companies.