Insuring Your Home-Based Business
by Wendy Priesnitz

Home business owners often ask if they need extra insurance to cover their home-based businesses, aside from their regular household insurance. The answer to this question depends upon the kind of business, the location and the kind of coverage you want.

Your homeowner's or tenant's insurance policy will probably include public liability as well as fire and theft coverage. This insurance might cover your home business, but it might not, depending on the degree of hazard created by your business. Each policy is different, so read the fine print. Be sure to inform your insurance agent that you are starting a home business, in order to protect your personal coverage. In some cases, a new commercial policy may be required, depending on the type of business and the risk involved. In other cases, the basic policy can often be supplemented to provide the extra coverage at a minimal cost.

If you are producing a product, you might want to consider product liability protection in case someone were to sue you for damages resulting from use of your product. Most trade shows now require that you carry public liability insurance as a prerequisite to renting exhibit space.

As a self-employed person, you might also want to consider disability insurance, which provides income if your work is interrupted due to a major illness or injury.

Also available are various types of life insurance which, for instance, can provide funds so that, when you die, the disposition of your business is handled according to your wishes. Insurance can provide cash to liquidate or continue the business until it's sold, or to buy out a partner's share on the death of that person.

Insurance is a complex topic, so consult your agent to define your own particular needs.

This article is reprinted from the Home Business Advocate. This newsletter is no longer being published. More home business information by Wendy Priesnitz can be found in her book Bringing It Home

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