Home business needs

Home based business is a business which is usually run out of you, the insured's, home. Some examples would include Mary Kay Cosmetics, Watkins products, Massages, Health Products, etc. Your home based business could also be real estate, technical writer, accounting or other forms of more traditional business services.

If your business qualifies as a home based business then you could save money on your business insurance. It could also be very easy to set up and maintain your home based business insurance.

Most insurance companies build in a minimum retained premium so that even if you have a small business you will pay this minimal amount of premium. If you can add this business to your home insurance then the minimal premium amount does not enter into the picture. This can result in a big savings on your business insurance.

Be aware that if you require professional liability coverage then this is usually excluded. This is why you need to evaluate what your risks entail and whether or not this type of package will suit your needs.

How do you get this special rate of insurance? There is usually a qualification process. A person who has the Mary Kay business or does technical writing from their home is likely to fulfill the criteria. As with most insurance products, not all companies are alike. You need to consider the options available to you with the coverage that you require.

The home based business policy usually includes an amount for office furniture, computer equipment, accounts receivable, valuable papers and may even have a business interruption component. The liability will have to match the level that you have set up for your property policy. So you cannot have $2 million business liability and $1 million on your personal property liability.

Check with your broker or agent about the coverage available to you. If you do have a claim that ties into your home based business and you do not have coverage then you will likely not receive any payout. Home insurance policies do have coverage for "incidental office". An incidental office is usually defined as one that is in addition to the office you attend outside the home for your work.

Home based business insurance pricing can be quite reasonable and the coverage more then you would expect to receive. This may be an excellent start for your insurance program and depending on what you do, could be a good long-term solution.