McQuiston: Things To Consider When Starting A Home-Based Business

By ALLEN MCQUISTON
The Jemez Agency

Starting a home based business might sound appealing (working in your PJ’s, setting your own hours, no boss!!). However, you need to make sure that your business is properly insured.

Here are some questions to ask yourself about your endeavor:

  • Will merchandise be stored in your home?
  • Will you have office equipment?
  • Will there be customers on your property? What if a customer slipped on a wet floor or an icy sidewalk?
  • Are you selling a product? What if a customer is injured by your product?
  • Are you providing a service? What if a customer is not happy with your work? A mistake is made? Or you missed a deadline?

If you can answer yes to any of these questions, then you may want to review with an insurance professional, your insurance exposures.

Here is why:

Your Homeowners Policy – The typical homeowners policy doesn’t provide coverage for a customer who’s injured on your property and may only provide limited coverage up to a special limit of liability for damage to merchandise or office equipment that’s associated with your business. For some home-based businesses, you may be able to add an endorsement to your current policy to provide coverage.

Depending on the scope of your business, you may need a separate policy altogether to provide adequate coverage.

Let me give you an example. I am in the insurance business. I own hand tools, hammers, saws, screwdrivers, you get the idea. If they are stolen from my home, no problem.

I am covered – But let’s say I’m a contractor and the tools are stolen.  Are they covered?  Probably not if they are used in his business. They would be considered business personal property.  The contractor would need coverage for his tools on a business policy.So what does the contractor (or literally hundreds of other businesses run out of homes) do to protect his property (and liability)?

A Commercial Insurance Policy – This type of policy is for a home based businesses that may have a lot of merchandise and/or equipment and have the need for more and different types of property and  liability coverage.

If you are thinking of starting a home-based business or already have one and thought your homeowners policy had you covered, speak to your local insurance agent.

They will be able to help you decide on the policy that is just right for your business.

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