Guest Article: Insurance for the Home-based Entrepreneur

By Richard Albert

You make that familiar left hand turn into the old neighborhood and immediately sense something is wrong. Call it intuition. As you round the last corner to your street, the red flashing lights confirm your worst fears. Firemen hose down the remnants of all that remains of your home. A few wisps of white smoke mark what had been a spectacular 3 alarm blaze just an hour ago.

Fortunately all of your loved ones are with you in the car. But you own and operate a home-based business. Are you covered by insurance? Are you now bankrupt?

If you are like the majority of home-based business owners, you're in serious trouble. I'm surprised at the number I talk with who don't have insurance coverage to protect their home business operations and equipment from theft, damage or loss. Many even assume they are covered when they are not.

Although too often neglected by home entrepreneurs, in surance should be an important part of any business plan. Minimal in surance coverage brings peace of mind and could save your business in the event of a fire, flood, theft or other uncontrollable occurrence. Ask yourself the question - if your home was completely destroyed by fire today, would you have a business tomorrow?

Insurance Problems for Home-Based Entrepreneurs

Home business owners face no less than an "under-insurance" crisis. The main problem is a mistaken belief that existing insurance policies automatically protect home businesses. In fact, many homeowner policies contain language and clauses that explicitly exclude coverage for business uses and business property. Examples of other insurance problems for home business owners include:

• Business use of an automobile - Accidents while on a business trip or business property stolen from a car may not be covered under existing property and automobile policies.

• Theft or damage to home office equipment - Often not covered under homeowner or apartment dweller policies, which usually cover only personal property.

• Healthcare - Inadequate or lack of coverage altogether, in higher proportions than the non-home business population

• Disabilities - Lack of coverage to protect income in case you become disabled

• Coverage - Not getting the correct types.

• Existing homeowner policies - voided due to a business being operated from the home

• Special coverage - lacking for computers and software.

• Liability - no coverage for people who visit your home for business purposes or for liabilities that result from business activities outside the home.

• Partnerships - No liability coverage for actions of partners