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This
is an Insurance article by an independent author and jml
Insurance takes no responsibility for its accuracy or content
Do
I Need Insurance for My Home Based Business?
By David
Ruiz
Generally,
you do not meet with clients at your home office if you run
a home-based business. In a home-based business your bigger
concern is protecting the equipment (property insurance),
not the customer liability (casualty/liability insurance).
Depending on the scope of your home-based business, your homeowner’s
policy might not be enough to cover the cost of your business
equipment. A homeowner’s policy usually covers for a small
amount, but it is often not enough to cover you business equipment
losses. If this is the case, you will have to shop around
for more substantial business insurance or increase the coverage
of your homeowner’s insurance.
Even
if you are not meeting clients in your home, you might have
liability issues. If, for instance, you are selling food products
wholesale or creating a product, your product will still have
liability. You should get special product liability insurance
based on what type of business you are doing. The pricing
of this insurance will depend on the type of product, forecasted
sales amount and history of business.
Finally,
if you are a professional such as a lawyer or doctor working
from your home, you might need to purchase professional liability
insurance for your home-based business.
Insurance
Solutions for the Home-Based Business
The
easiest way to insure a home-based business is to increase
the coverage of your homeowner’s policy to a suitable amount.
With a small premium increase, you can increase your property
coverage by thousands of dollars. This increased coverage
will cover the cost of your business equipment as well as
the personal property in your home.
The
homeowner’s insurance packages are very limited. If you have
expensive equipment, many clients visiting, or you are a potentially
risky business, then you will have to purchase a home-business
insurance policy. The home-business insurance policy offers
you better coverage against business interruption and product
and service liability, and provides more protection against
customer liability and lawsuits. Some home-business insurance
policies allow the home business to have full time employees.
Overall, this solution is more comprehensive and more professional;
however, be prepared to pay more than you would if you just
extended your homeowner’s policy. Keep in mind that home-business
insurance and homeowner’s insurance are two different insurance
solutions.
If
you have an outside office or storefront, you need regular
business insurance. This is usually referred to as a business
owner’s policy. This type of insurance covers many business
risks and can be customized to fit your particular business
needs.
What
type of business insurance should I get?
Insurance
can cover a variety of catastrophes including natural disasters,
fire and theft. Providing good health coverage for your employees
can help you retain them. However, these are not the only
types of insurance available. You may be required to carry
life, business interruption, or auto insurance depending on
the nature of your business. Other types of insurance cover
business liability or damage to your inventory.
Banks,
investors, and other lenders may require a business owner
to have good insurance coverage before processing a loan;
this minimizes their risk of losing their investment. Investors
and partners may also require a business to have a “key man”
insurance policy—life insurance on the owner or crucial employees—so
the business can survive in the event something happens to
these people.
Types
of Insurance:
Property
Insurance covers property loss from fire, smoke, theft,
explosion, vandalism, and other disasters.
Liability
insurance protects your business in the event that your
business activities cause harm to a person.
Crime
Insurance protects against burglaries, robberies, and
employee theft.
Auto
Insurance protects against injury and the cost of repairing
your vehicle.
Business
Interruption Insurance protects against the loss of projected
earnings due to a temporary shutdown of the business.
General
Liability Insurance covers legal liabilities from accidents
and other injuries dealing with your business, with the exception
of a work-related injury.
Health
Insurance protects the owner of the business in case of
illness by providing payment for medical expenses.
Business
Life Insurance covers against the death of a key participant
in the business such as the owner or partner.
Disability
Insurance covers you in the event you become disabled
and cannot work.
©
Guideye (2006) David Ruiz and Ulas Neftci are NYC Business
Consultants currently working on Guideye.com.
Guideye.com
is a resource for starting, operating and financing a small
business in New York. The site offers step-by-step guides
for forming a company, financing information, Taxes, Insurance,
Business Plans and other operational concerns. The site also
includes useful resources for entrepreneurs.
Visit
our website at http://www.guideye.com
Article
Source: http://EzineArticles.com/?expert=David_Ruiz
The
information supplied on this page is by a third party and
jml Property Services do not take any responsibility to its
accuracy ©jmlpropertyservices 11/06
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