Many people don't think about insuring their home business if it's secondary to an office away from home. If you start a small jewelry making business, for example, in an extra room or if you do freelance dot.com work in an in home office, your renters insurance policy won't cover you entirely.
Home-based consultants, artists, computer programmers, graphic designers, tutors, teachers, architects, writers and anyone else with a traditional office at home are at risk. If you maintain a home office for an outside job, like many lawyers, doctors, accountants, contractors, plumbers, photographers and designers do, you are at risk. If you receive any packages related to your business or meet with clients in your home, you are doubly at risk. Anyone who is hurt while on your premises can hold you liable.
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A basic policy will limit the coverage for business property to $5000 if located on the premises, and $1000 for when it's away from the residence. Neither does a basic policy cover ant business property:
- in storage
- here's as a sample
- held for sale or delivery after sale
Business documents, records or data regardless of the medium on which they exist are also excluded from basic coverage.
The limitations, however, to business coverage in a basic renters policy are even stricter with regard to liability. In some policies, liability coverage falls to zero when it's related to a business. Under liability losses we do not cover you might find, “ personal liability and medical payments to others do not apply to bodily injury or property damage arising out of business pursuits of any insured and arising out of the rendering or failing to render professional services”.
If you run a business from home, you need to consider getting a home business policy, which is just as affordable as a renters insurance policy. Don't think that your home policy will cover you sufficiently for when something goes wrong related to even the smallest business. The second you do business in your home, your insurance coverage can drop by tens of thousands of dollars. If a fire destroys your home office, the $20,000 worth of computers, scanners, printers, fax, phone, furniture, documents, books and files won't be covered by your basic renters insurance policy.
Now, you'll be able to collect the policies limit, which is usually $5000. Even if you had purchased a rider for that expensive computer, it may not come into play when your insurance company finds out you had been using that computer for business pursuits. What's worse, many renters insurance policies limit coverage for stolen or destroyed business property to a ridiculously low $250 when you're away from home.