If you work or operate a business from your home, have you told your homeowners insurance agent?
According to research, at least 40 million people work full or part time at home. An Allied Insurance Group study several years ago indicated that income-producing businesses are being operated from almost 20 percent of American homes...and this doesn’t include people who just take work home at night. According to a readership survey conducted by Home Office Computing magazine, 82 percent of their readers run full- or part-time businesses from their home, 79 percent have done so for more than two years and many of them have four or more employees.
If this scenario describes you, you could have coverage gaps if you are only relying on your homeowners policy. Although space doesn’t permit a complete analysis of the subject, the following are just a few of the gaps you may have if you operate an in-home business or, in some cases, even work at home.
The definition of “insured” in the homeowners policy does not include corporations, nonresident “partners” or employees. The homeowners policy provides no property coverage for non-dwelling structures used for business.
The homeowners policy provides, for all practical purposes, no liability or medical payments coverage for any business activities. Although the homeowners policy does permit certain incidental business activities, coverage is only provided by endorsement and is very restrictive.
The homeowners policy provides minimal coverage for business personal property. If you or your wife sells Mary Kay cosmetics, you may want to take an inventory and think about purchasing adequate coverage. The homeowners policy provides no business income coverage.
Although many in-home businesses are of a professional, service nature, the homeowners policy provides no professional liability coverage. The homeowners policy provides no coverage for persons eligible to receive workers comp benefits.
Clearly, many, if not most, persons with in-home businesses need commercial coverages.
In many cases, a hybrid in-home business policy may be appropriate. In fact, such combinations of personal and commercial lines may provide broader coverage than a commercial policy alone.