Ruth Susswein: Hi! I am Ruth Susswein from consumer action, today I'm going to discuss home based business insurance coverage and what to look for in policy options, no matter how small your business there are risks to protect against.
Insurance is an essential part of protecting a home based business. You can't always count on a homeowner's or renter's policy to cover your small business risks, adding a rider or endorsement is the least expensive solution, but offers the least protection.
However, if you have few customers or employees, minimal deliveries, little equipment and no valuable inventory in your home office, add on coverage might be all you need. Check with your state insurance department or an insurance agent to see if add on coverage to your home owner's policy is adequate for your home based business.
An in-home business owner's policy provides more protection by combining home owner's and business coverage in one policy, this typically offers coverage for loss or damage to property, equipment and records, plus loss of income due to business interruption, these policies might include Business Interruption coverage which protects your earnings if you can't operate because of unexpected events such as a fire or power outage. Product Liability coverage protects you against law suits from injuries caused by your product or service, a business owner's policy or BOP offers the most comprehensive home based business protection. The BOP's typically protect against loses from property damage, fire, smoke, frozen plumbing or theft, even when your traveling with insured items. BOP's may offer both on and of premises protection for accidents that cause bodily injury or property damage. This could include liability or medical coverage if someone is injured on your property or someone else items are damaged while doing business with you. BOP's include protection from employee, customer and contractor claims and may shield you from contract or advertisement liability including liable or slander claims.
Not included in BOP's are disability, health and worker's compensation, some other types of insurance to consider, data compromise, data breach coverage protects against legal and other costs if customer data is stolen or released accidentally.
Employment practices coverage protects against employee claims of discrimination and unfair treatment, Director and Officers liability coverage protects against law suits claiming mismanagement, Key person coverage insures the life of the owner and key employees. Flood protection for businesses based in a flood zone requires a separate Federal Flood insurance policy.
You might not need every kind of coverage we have mentioned, but it pays to know the ins and outs of business coverage.