Be Aware! Your Homeowners or Apartment Dweller’s insurance may not cover your business-related property or any business-related liability.
The same is true of any personal liability insurance that you own. Most personal policies specifically exclude any coverage for commercial or for-profit activities. Read your policies carefully, including the limitations and exclusions. Don’t assume that you are covered!
You may be able to purchase a rider, or special add-on policy, to your Homeowner’s or Apartment Dweller’s insurance to cover your business insurance needs. Ask your insurance agent. If that option is not available, or is not adequate (e.g., covers only equipment but not liability), several insurance companies have started programs specific to small service businesses or home-based businesses. Two that I know of are:
- State Farm Insurance (www.statefarm.com) has a “Business in the Home” insurance program
- Hartford Insurance (www.hartford.com) has a “Spectrum” program that is geared towards small businesses
If you have experience (good or bad) with a specific business insurance package or company, please send me an email and I will post your recommendation on this site.
Here are some common insurance terms to help you understand and select the best insurance option for you:
Accounts receivable coverage: If your records are destroyed by a fire, or another disaster against which you’re insured, you will have a hard time collecting money owed to you. This coverage reimburses those sums, plus the expense of reconstructing the records. (It doesn’t insure the physical value of the records, such as computer disks.)
Business interruption insurance: Covers lost income due to interruption in normal operations from a variety of factors.
Business owners policy (BOP): A combination or “package” policy for small- to medium-sized businesses that covers both business property and your liability for bodily injury or property damages.
Business personal property insurance: Covers all personal property that’s on the business premises, but only while it’s on the premises. There can be limited coverage for the same property while it’s off-premises.
Commercial general liability insurance (CGL): Coverage that provides for liability arising from fire, product, advertising, and personal liability, and for medical payments. Typically corporate clients will ask that any contractors (such as coaches) have a $1 million or more of liability coverage.
Commercial inland marine coverage: This coverage insures property when it’s in your possession and when it’s being shipped. It pays for damages incurred in almost any circumstance, including fire and theft, regardless of where the property is located.
Computer coverage: For losses resulting from damages to your computer equipment or network.
Errors & omissions liability coverage: Protection against claims alleging that negligence or omissions on your part led to personal injury or property damage.
Home business coverage: Standard homeowners insurance policies do not include coverage for home-based business operations. However, you may be able to purchase a rider, or a special policy add-on, that covers the property and liabilities for your home business.
Property in transit or off-premises: If your property coverage doesn’t include off-premises property, or restricts coverage for off-premises losses, you may need this coverage.