Homeowners insurance may not cover essential business files, equipment, or inventory for home-based business owners. To fully protect your business, a home-based business insurance policy is a smart choice for business owners working out of their homes. Home-based business insurance protects business owners from claims such as third-party liability, property damage, and other risks. The typical cost of protecting a home business varies, depending on several factors. Some of the more significant factors include the type of coverage you need, how your coverage is purchased, and the amount of your deductible. It’s also essential to account for any changes to your business that can impact your insurance needs after you’ve purchased a policy.
Types of Coverage
While general liability and commercial property insurance are the most common types of home office insurance, you may need to combine several types of insurance coverage, depending on the kind of home-based business you’re operating. For example, if you use your vehicle for business purposes, you should have your vehicle properly insured for business use. Some other aspects of your business that will determine the coverage you need include:
- If you have clients visiting your home
- If your business involves selling a product
- If your business provides services
- If you provide professional advice as part of your business
How Policies Are Purchased
It’s not uncommon for business owners to purchase separate policies from different insurance providers. For example, business owners may purchase general liability coverage from one provider and errors and omissions coverage from another. If your business requires multiple types of coverage, bundling all your business coverage under a single policy with one provider may lower your costs.
The amount you pay out of pocket for a covered claim is called your deductible, and it will affect the cost of your home business insurance. In general, higher deductibles result in lower out-of-pocket costs, and lower deductibles result in higher out-of-pocket costs. Before selecting a deductible amount, it’s critical to consider how much money you’ll have available to pay out of pocket if you need to file a claim.
Changes to Your Business
It’s important to review your policy annually to make necessary coverage adjustments any changes to your business may require. For example, changes in the number of products you offer or the number of employees you have may require you to purchase additional coverage or allow you to reduce some of your coverage.
Owners of home-based businesses need to make sure they protect themselves by purchasing the right insurance coverage. For affordable, reliable commercial insurance as well as homeowners, renters, motorcycle, and car insurance, call on the trustworthy professionals at Altra Insurance Services. Reach out to us today at 619-474-6666 to learn how we can satisfy all your insurance needs.