If you're running a home-based business or working from a virtual office, you may be wondering whether your home insurance is sufficient to cover your business needs. Unfortunately, typical homeowner and renter's policies do not provide adequate protection against damage, theft, lawsuits, or interrupted operations, any of which could prove a serious threat to your financial stability. Here are a few good reasons why you should insure your home office.
It Provides Better Coverage For Your Property
Good quality office equipment does not come cheap. Between your computer, printer, scanner, fax machine and office furniture, the cost of repairing damages from a flood or fire, or replacing stolen goods, could very quickly exceed the coverage offered by a basic home insurance policy. Business property insurance can offer either cash value or replacement costs for any items you use in the course of conducting business. Premiums may be slightly lower for a cash value payout, but replacement cost will stand up to inflation in the cost of technology. Consider carefully which option may be best for you.
It Offers Protection Against Liability
Although you may not have employees working out of your home office, you might be surprised when you consider the number of people who visit your home for business purposes. For example, couriers and delivery people, perhaps even clients and associates, likely stop in at your home office from time to time. If someone happens to trip on your stairs or sprinkler, or if sensitive client information is hacked and stolen from your computer, you could face a hefty lawsuit should the injured party decide to sue you for the damage. No one likes the thought of lawyer fees and court costs, not to mention the time lost from your daily operations. Business liability insurance will cover damages to visitor property as well as injury to their person, and let you sleep soundly at night.
Budget-Friendly Options are Available
Whether you are telecommuting, freelancing, or running a small business from your home, keeping overhead costs down is important, and the idea of paying for more insurance may seem daunting. Many insurance companies today offer an "add-on" option that combines coverage for basic business needs with your regular home insurance. Add-on options will offer higher coverage for office equipment as well as third party liability, providing the business essentials in a convenient package with your homeowner or renter policy. If you need another budget-friendly incentive, don't forget that business insurance costs will be tax deductible, promising a little relief at tax time.
If this list of reasons has persuaded you to insure your home office, don't procrastinate. Start looking for the most effective policy option that is right for your budget, but that also provides all the coverage you need. In the meantime, be sure you take measures to avoid claims, which will increase the cost of your insurance premiums. For example, installing a security system and smoke detectors, and keeping backups of all your files, prove that you are taking steps to reduce your risk, which can work to your advantage with an insurance company.