Homeowners' Insurance Policy Endorsements

The National Bureau of Labor Statistics, in a study, has revealed that out of every 10 people 3 have home based business. Additionally, over 66% of the 21 million who work from home, are self employed, running their business from home. Tragically, more than 50% out these home business owners are underinsured. Even more unfortunately, 40% of those who participated in an insurance survey carried out by the Independent Insurance Agents of America (IIAA), are uninsured as they are under the impression that their business is covered by their homeowners insurance policy.

So, if you are one of those who thought that your homeowner's insurance coverage will protect your business as well, then you need to realize that it doesn't. In fact that insurance coverage provides you a shield of only $2500 for damages that occur on your home premise and $250 that occur off that site. Additionally, homeowners' policy doesn't cover any home business liability, ex: a delivery person is bit by your dog and gets hurt etc.

So, if you have recently set up your own home business, it's time you purchased a home business insurance policy and the three primary choices you have here include:

Homeowners' insurance policy endorsements

In-house business insurance policy

Business owner's package insurance policy (also called BOP)

As a homeowner's insurance policy owner, you are entitled to get endorsements on it, per se based on the nature of your business. These endorsements offer you coverage specific to risks or perils. All you need to pay is around $14 per year and get coverage worth $5000 as against $2500 standard policy limit for business related damages.

There are some insurance companies that have now begun to give endorsements that offer property and limited business liability protection. However, as a home business owner, you are eligible for endorsements if your business generates equal to or less than $5, 000 on a yearly basis. You can get endorsements in almost all states of the US.

In-Home Business Insurance Policy

In order to cater to the needs of the increasing number of home-based business owners, insurance companies have come up with a product known as "in-home business" insurance policy. By paying $200 each year you can get property coverage worth $10,000. The in-home business insurance includes general liability coverage. Depending on the risks and perils involved in your business, you can buy small business liability coverage ranging from $300,000 - $1 million.

The in-house business policy covers loss of income due to damage to your home as a result of which you may need to shut down your business. It will also take care of your ongoing expenditure like payroll for duration of 12 months.

Business Owner's Package Insurance Policy

A BOP is, in particular, good for home based business owners that have offices in more than one location and includes coverage of businesses of 25,000 sq. ft. and gross sales of around $3 million.