Insuring your home business

August 19, 2012 By Wells-Fargo

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If you have a home business, what type of insurance do you need?

A standard homeowners policy may provide some protection for business equipment, but coverage varies and it may not be enough. In addition, it won’t cover your business if a customer or supplier is injured on your property or while using your product. To protect yourself and your home business:

• See if you can add an endorsement to your homeowners policy. Your insurer may offer one that could add property coverage and some limited liability coverage.

• Purchase in-home business insurance policies. Some insurers offer specific in-home business insurance policies with some of the same features as larger commercial policies but with lower policy limits and at a lower premium. For example, if you have to shut down your business because of damage to your house, the in-home policy will cover the income the business loses and ongoing expenses, such as payroll, for up to one year.

• Get a business owners policy. Many insurers offer policies combining property insurance, business interruption service and liability insurance.

Using your vehicle for business?
Think again. Your personal auto insurance policy covers your vehicle for personal use but may not cover business use. All vehicles used primarily to conduct business must be protected with commercial auto insurance, generally a combination of bodily injury, property damage, collision and comprehensive coverage.

Are you hiring?
Business is booming and you may have just decided to hire. Most states require that you have workers’ compensation insurance. And it’s likely the most complex insurance coverage, so make sure you check with the state department or work with an insurance agent familiar with your state regulations to determine the best solution for you.

More is often better
Depending on your assets, you may want to consider the additional protection of an umbrella liability policy. It provides extra protection that takes effect when lawsuit-related costs exceed an auto or general liability policy’s limits. You can get the coverage you need now and increase your limits as your company grows.