In today’s society, having a home based business is as easy as ever. From child care facilities, to made-to-order baked good enterprises to online shops, it certainly seems that practically everything fits into the home business box!
But while business at home may be booming, for many entrepreneurs, something is definitely lacking. Erroneously believing that the standard homeowners insurance will cover them for any liability that could occur, these businessmen may actually be sitting in a booby-trapped illusion – just waiting for the accompanying risk exposure to explode into possible financial devastation.
For the most part, typical Homeowners coverage (or policies prepared for condo owners) will not comprehensively protect the business that is located within the premises. Created to conform to standard home liability situations, this form of insurance has definite limitations in terms of home business coverage.
The following insurance claim cases serve to illustrate the matter in a question and answer form.
Q: What happens if a fire damages the inventory of a online business operating out of the owner’s house?
A: A tailored commercial insurance policy will cover the loss up to the business personal property limit.
Q: Will the home business plan protect the business owner from general liability like a trip and fall incident with a customer?
A: This form of a business policy will definitely cover the loss – something that otherwise is excluded from the owner’s general homeowner’s policy.
Q: What about business equipment within the home where the business operates. Are related pieces of equipment covered?
A: If something like a theft occurs, the Home Based Business policy will provide recompense to replace any item, up to the limit of the policy.
Q: So what will happen in the event the business owner leaves his home business premises for a trade show or other related commercial event? Will the coverage protect him at the alternate location?
A: Unlike a standard Homeowners policy, this form of indemnity will protect the based business owner for a mishap like a trip and fall incident even away from the home business premises.
Q: If the business that operates out of the home is registered as a corporation for tax purposes, will the business policy designed for operation out of the owner’s house cover him or her for any related losses?