How To Choose a Home Office Insurance Plan

Homeowner and Tenant Insurance Insufficient for Home Business Losses

Homeowner and tenant insurance policies rarely offer sufficient coverage for home business owners.  Some companies offer home office insurance as a rider on a homeowner policy; however, this coverage is usually limited to a small sum to replace office equipment and almost never includes professional liability insurance.

Protect your home business against losses due to fire, theft, or water damage with an inexpensive home office insurance policy.

Step 1

Inventory all home office equipment, supplies, and furnishings.  This could include computers and laptops, desks, chairs, filing cabinets, inventory, and books.  Calculate the replacement value if everything was lost in a fire.

Step 2

Estimate lost revenue in the case of home office damage.  If the house flooded and the office was unusable for a period, how much income would you lose in the time it took to complete repairs?  You might consider purchasing business interruption insurance.

Step 3

Inquire about liability coverage minimums with your state, province, or municipality.  Even if customers never visit your home office, many areas require a minimum amount of professional liability insurance coverage.

Step 4

Determine your insurance needs for staff.  If you employ staff members in your home office, you may need additional professional liability or disability coverage.

Step 5

Ask about your automobile insurance coverage.  In some cases, personal automobile insurance policies do not cover accidents or damages if the vehicle was used for work at the time of the incident. 

Step 6

Make a list of all home office insurance policy requirements based on the preceding five steps.  List all property, liability, disability, automobile, and business interruption insurance concerns.

Step 7

Get home office insurance quotes and compare.  Contact at least five different insurance companies to compare insurance quotes, levels of coverage, and deductibles.  Keep going until you find a company with an affordable solution covering all of your requirements, or at least additional riders to cover your needs.  Ask about discounts for holding several policies with one company or paying for the year in advance.

Adequate home office insurance is a must for home business owners and telecommuters.  Even if you work in an office during the day and only use the second office occasionally, the loss of several thousands of dollars worth of equipment could be crippling.

Professional liability insurance and home office insurance are tax deductible expenses and well worth the premium.


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