Working from home may sound like a wonderful pipe dream to you, but for many Americans it’s a daily reality. In fact, three out of ten homeowners operate a home-based business. However, many of these small business owners wrongly believe that their homeowner’s insurance policy will cover any damages that occur and, therefore, they may go underinsured for years. But is it really important to insure your home-based business? These three examples will help answer that question:
Example #1: You begin to cook dinner early and leave the kitchen to check if an important work email came through. It did arrive and it demanded immediate attention. You lose track of time as you resume work and a fire ignites in the kitchen, resulting in the ultimate destruction of your whole house, including your business equipment and files.
Example #2: A delivery person brings you a package that contains work-related materials. Upon handing you the parcel, he or she trips over the clutter adorning your doorstep and breaks an ankle. Since the injury happened on your property and as a direct result of your negligence to keep the walkway safe, you will likely be considered legally liable to cover the delivery person’s medical expenses, and perhaps even lost wages until the individual can resume work.
Example #3: A storm brews one night and rain pelts down on your roof. You hug your pillow around your head to block the noise, but a loud crash wakes you. The source of the sound, once you find it, belongs to a tree limb that snapped off after being struck by lightning. It fell through a window and onto your work laptop. Meanwhile, the broken window lets rain soak the entire room, damaging your files and electronics.
A standard homeowners policy will cover up to $2,500 in damages for a home-based business and the rest of the expenses must be paid out-of-pocket, unless you have adequate coverage in place before these (or similar) incidents. Your local agent can help you determine the right amount of insurance for your business, whether that involves a rider on your homeowners policy or a separate business policy for larger home-based businesses.
Learn how to protect your home-based business separately from your home. Call Greenlee Compton Insurance at 740-587-7523 for more information on business insurance.