by Trevor Juntunen

Created on: August 16, 2009

Many people do not realize that their home insurance policy does not cover their business property or pursuits properly. Most policies restrict the amount of coverage on business property to $2,500 or less. Liability for invitees, guests or clients, of the business may be excluded.

In response to the growing number of homes that have businesses operating in them, insurance companies are coming out with endorsements to provide coverage. The scope of the business pursuits is still limited. In home offices and studios are the primary focuses of these endorsements. Individuals doing manufacturing of any kind, operating an automobile repair or body shop or even a

bed and breakfast would need to obtain a regular commercial insurance policy.

When adding on coverage for an in home business, you will need to total up the value of the equipment that you use: desks, computers, laptops, chairs and other office equipment that you use in the course of working. This figure is your business personal property amount. This will be listed on a different line on the policy than the household contents.

Liability coverage is endorsed onto the policy. The charge for this can vary from a few dollars to several hundred dollars. This charge is determined by the nature of your business. For in home offices that have no clients coming to the home, the liability charge will be small. An example of this would be a technical writer who works on their home computer and occasionally goes into the company office. The liability charge would be higher for a business that sees many clients in the course of a day. An example of this would be a chiropractor who sees clients in an office in his home.

When discussing liability, always remember that the coverage provided by the home insurance is premises liability only. Professional liability, sometimes referred to as Errors & Omissions or Malpractice, is a completely separate issue. In the case of the chiropractor, they would need to purchase a medical malpractice policy to insure against claims arising out of improper treatment. Premises liability covers injuries sustained by being on the property and professional liability covers errors or injuries caused by you performing your job.

If your in home business has any employees, you will be required to have workman's compensation insurance. This provides medical benefits coverage for an employee that injures themselves in the course of doing their job.

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