Insurance

Have you checked your homeowners insurance policy lately? If you have a home office, its time you re-evaluated your coverage.
   The standard homeowners insurance policy only provides about $2,500 in coverage for computers and other business equipment. This is probably not enough to cover the replacement cost of all your equipment.
   The cheapest way to increase coverage for computers and related equipment in your home is to tack the additional coverage on to your existing homeowners policy.
For as little as $20 a year, you may be able to get $10,000 to $25,000 in protection for all your high-tech gadgets.
   While such increased coverage may be enough to replace a computer system that's primarily used for entertainment, most people who run a home-based business -- or regularly use a spare room as an office -- need more comprehensive coverage.
   For example, few home-based entrepreneurs realize that the liability coverage provided by a standard homeowners' policy does not cover accidents stemming from their business operations.
   "If you're a typical homeowner and the mail-carrier breaks a leg on your porch, the accident will be covered by your homeowners policy," said Steve Goldstein of the Insurance Information Institute, an industry-funded consumer information group headquartered in New York.
   "But if you work out of your house and a delivery guy falls while dropping off your business suppliesor if a client trips over a filing cabinet in your home-officethe homeowners policy won't provide any liability protection because the accident took place in conjunction with your business."
   Real estate agents, mortgage brokers, doctors and other professionals who regularly work from home are often surprised to learn that the professional liability insurance provided by their employer or partnership won't necessarily cover them if they screw-up while working in their house, Goldstein added.
   If you work out of your home, there are three ways for you to get better insurance:

Add an endorsement to your existing homeowners policy.
Buy individual business insurance policies to provide the various types of coverage you need.
Buy a full-blown business owners policy, or "BOP," which combines the property and liability insurance you need in a single policy.

   Fortunately, the mushrooming number of home-based businesses has prompted many insurers to begin offering affordable "mini-BOPs" to people who work out of their house, Goldstein said.
   A typical mini-BOP covers the loss of business property on or off the premises, the loss of valuable documents or computer disks, and a limited amount of liability coverage if someone is hurt while visiting your home office.
   In addition, some mini-BOPs provide up to $10,000 of coverage for your accounts receivable -- meaning you'll get reimbursed if a client refuses to pay a legitimate bill.
Since no two businesses are alike, contact your insurer to determine whether additional coverage is needed.
   For a free booklet, "Insuring Your Home Business", send a self-addressed envelope with a 32-cent stamp on it to III, Publications Department, 110 William St., New York, NY 10038.

Home Office Insurance