Do you have a home based business? Are you a consultant for companies such as Mary Kay, Norwex or Pampered Chef and keep inventory or your sales kits at your home? Do you know if your basic homeowners policy will cover your inventory or liability if someone slips and falls at your home while there on business? If you answered yes, then you need to read Chris Beck’s article The 3 Biggest Mistakes Home-Based Business Owners Make so you will be fully covered and protected.
As a one time insurance adjuster, I want to touch on the insurance portion of the article. “According to a survey by the Independent Insurance Agents & Brokers of America, 40% of people who work from home believe their homeowners insurance automatically includes coverage for their home-based business. Unfortunately, they’re completely mistaken.” If you have a customer who comes to your home to buy handcrafted items you sell at craft fairs and they trip and fall, your homeowners insurance will most likely deny the liability claim because the customer was at your home for business reasons. PHC has boxed up or discarded business inventory when it has sustained fire damage or water damage. This inventory may not be covered or may have limited coverage under your homeowners policy. How much coverage, I can’t say, but it is a good idea to pull out your homeowners policy and read through the coverage and exceptions. If you still have questions, ask your insurance agent. That’s what he/she is there for. They are the experts and if they aren’t sure about coverage issues, they can make a phone call to find you an answer. Most of the time, they can add an endorsement to your home insurance policy or set up a separate business insurance policy. Agents want to make sure you are protected for all types of losses from fire damage to vandalism to loss of use, so make sure to keep them updated when you take on home based business.