Does my homeowner’s insurance cover my home business?

Many Americans today rely on their talents and special skills to make ends meet, a phenomenon we are seeing more and more as unemployment rates continue to rise. The decision to start a home business is one that most people have not taken lightly. Many families today are only supported with the income generated from these types of businesses.

If you are one of these entrepreneurs who decided to take the risk of starting your own home business, you may have overlooked a risk factor that can make or break your business and the well-being of your family in the event of theft or fire . Insurance. Every homeowner has some sort of insurance policy and it’s very easy to assume that because your business is based in your home, your business assets are covered under the blanket of “assets” covered in your insurance policy. Unfortunately, in many cases this is not true.

The same applies to liability insurance. Your insurance policy will most likely cover the hospital bills if a child who spends the night at your house falls and breaks an arm, but if a business client comes into your house and breaks his or her arm, the same hospital bills will likely be denied.

If you have a home business, it is very important that you contact your insurance agent as each company has different ways of handling home businesses. Some involve electronic equipment that would normally be found in a non-business home, such as computers, televisions, and office furniture. But most don’t cover things like inventory or equipment specific to your type of business that a general homeowner wouldn’t own.

The line between a home business and a home is sometimes very blurred. Only someone from your insurance company can explain the details of your current policy to you. Before you call, review your current policy and see if it contains specific clauses about business activities and business necessities. If it doesn’t clearly explain what is and isn’t covered, the best bet is to double check with your agent.

If you find that your insurance coverage is not giving you the business protection you need, see if your current insurance company offers the add-ons necessary to ensure you are protected. By bundling these add-ons with your current policy, you often save more than buying insurance from a company that specializes in insuring businesses. But as with any form of insurance, make sure you get some quotes from other companies before signing any plans. All it takes is one mishap that the insurance company can blame on your business and you could end up in a lawsuit that will cost you everything you’ve worked so hard for.