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HOME : Just the FAQs Ma'amHome Based Business InsuranceI started a home business a few months ago, and added on a room to the back of my house to accommodate my new office. Do I need to inform my insurance company of this fact? There's definitely
room for some additional insurance coverage! If your circumstances have
changed, your insurance provider needs to know about it -- for your own
protection. It is your
responsibility, as the policyholder, to inform your insurance provider of
any changes that might affect your insurance coverage, so the company can
make the necessary adjustments. From the insurance
company's point of view, it needs to know what new risks it is exposed to,
so it can structure and price your policy accordingly. You, on the other
hand, need to have the proper coverage to protect your interests. In your case, you have
not only made changes to the structure of your home, but you have also
started to work from there. Both these developments have insurance
implications. As far as the building
is concerned, there may be provisions in your policy that state that, if
you increase the value of your property by any significant amount and you
have a guaranteed replacement cost endorsement on your policy, you must
inform your insurance provider right away. Likely, you did spend
a hefty chunk of money renovating your house, and its value has increased
accordingly. If you didn't tell your insurance company about the
renovation, it might prevent you from claiming the full value in the event
of loss or damage. Now let's get down to
home business. First of all, business equipment is covered under your
homeowners policy only while it is on your premises, so if you take your
laptop, for example, on a sales call, you need additional coverage. Also,
there is a limit under your homeowners policy on how much you can claim
for business property in the event of a loss -- usually $2,000 in all.
That may not go far if you have a lot of expensive equipment. Finally, there are
liability considerations, depending on whether your business involves
people coming to your office, or whether you work away from home as well.
Make sure you explain your home business in detail to your insurance
provider, so you can get adequate coverage. When it comes to
protecting your assets, don't leave any stone unturned -- or any new room
uncovered! Make it your policy to review your insurance requirements every
year. Note: Remember, policies vary, so when in doubt, Contact Us. |
