People who work out of their homes face the unique risk of losing both their home AND their source of income. Despite this fact, many home-based business owners do not purchase separate insurance for their businesses. Home owner’s policies vary, but many will provide a minimal amount of coverage for home-based business property. Liability on a homeowner’s policy may provide coverage for employment such as a baby sitter, but NOT for employees of your home-based business.
There are options for gaining affordable insurance for your home-based business. Some home owner’s policies offer a home-based-business endorsement for very small businesses (a few thousand a year in income). For larger businesses, especially if you have employees, a stand-alone Home Business Policy is more appropriate.
If you gross over $250,000, or employ more than three workers, you may have problems. Also, you can’t usually bundle coverage with a home owner’s policy if you have a co-owner who isn’t a relative, or who doesn’t live in the home. In such cases, consider a more comprehensive business owners policy, known as a “BOP.”
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