Insurance Policies for Small Businesses

In United States alone, there are more than 18 million home-based businesses according to U.S. Bureau of Labor Statistics. However, only a small percentage have proper insurance coverage for their business, whether they deal with office and school supplies or sell cosmetic and personal care products. A number of small business owners, especially the home based entrepreneurs have a misconception that their homeowners insurance also covers their  home-based businesses. But most of such policies have limited the claim of business property loss to $2,500 only. The worst part is that such policies will never cover any business loss that are caused away from your home.

On the other hand, there are several insurances that are specifically designed for the home based business owners. But before opting for therm you will need to consider a number of factors, such as your business insurance needs,  the number of business related equipments you own, and the kind of inventory you have at home. You must also determine their total replacement costs. Now go through the terms and conditions of your homeowners policy and see if it is offering enough coverage. Also make sure that they are covering both liability and property damage.

Generally, there are two types of insurances that are best suitable for the home based business owners. They are the home office policy and BOP or business owner's policy. Those who are not willing to opt for any additional insurance policies can get "business pursuits" endorsement to their existing homeowner's policy so as to protect their business. However, it provides a minimum coverage. Thus, it is not a good option for those who own costly equipment and receive customers on site.

Though the home office policy provides better coverage than a business pursuits endorsement, it hardly offers as much coverage as a BOP. As a combination of business and homeowners policy, it eliminates any kind of gaps or duplicate coverage. If you own a few quality computer equipment and receive  not many business visitors, the home office policy is apt for you. This policy covers only some general business liability. In addition, it covers ongoing expenses and lost income caused due to property damage only for up to a year. It insures you against theft, personal liability, loss of records, and fire. However, only a few such policies offer insurance against natural calamities like earthquakes and  floods.

Last but definitely not the least is the business owner's policy or BOP. On the contrary, it is the best insurance policy available for the home based business owners. This policy covers both liability and property damage including general business liability, theft, and loss of data and income. Certain off-premises coverage are also offered. In addition, it duplicates your existing homeowners' coverage by insuring the structure that house your business. If required, you can also insure your outdoor signs and get insured against flood with a  business owner's policy.

No matter which insurance policy you are opting for, remember to get quotes from various companies. Compare the quotes and go for the insurance provider that offers the best package. Apart from getting an appropriate insurance for your home based business, you must take some initiatives to save your business from such damages. This may include installing a fireproof safe, smoke detectors, motion-sensitive lights, as well as drafting a disaster recovery plan.