According to a survey of business owners conducted by the US Census Bureau, about 51.6% of small businesses in this country were home-based in recent years. While these businesses are typically small with few or no employees, they often need the protections that business insurance can provide.
If you are among the many Colorado residents with a home-based business, a local insurance agent can help you find home business insurance coverage at an affordable price. That way, your business can continue to be profitable, even in times of trouble. Find an insurance agent near you to learn more.
What Is Home-Based Business Insurance?
Home-based business insurance (also referred to as an “in-home business insurance” or just “home business insurance”) is insurance coverage that is similar to a business owners policy (BOP) or business insurance policy, but with lower policy limits and a more affordable price tag.
Does Homeowners Insurance Cover Home-Based Businesses?
Your homeowners insurance can provide some coverage for your home-based business. However, this coverage is very limited.
In fact, most homeowners insurance policies limit coverage for business property to $2,500 and may provide you with up to just $250 in coverage for your business property when you take it off-premises, such as while you are using it at a job site.
Additionally, if your business is sued, the liability coverage provided by your homeowners insurance is not likely to offer any coverage at all.
Do Home-Based Businesses in Colorado Need Insurance?
If you have a small, home-based business that has little more in the way of assets than a desk, chair, computer, some office supplies, and a filing cabinet, your homeowners insurance will probably be sufficient to cover this property if it is lost or damaged by a covered event.
However, if you own a lot more in the way of business property, or you can answer yes to any of the following questions, you would probably be best served by purchasing in-home business coverage.
- Do you see clients in your home?
- Do you have employees working in your home?
- Do you keep files and records, including personal information about employees or clients, in your home, whether on paper or on your computer?
- Do you own a lot of expensive business property?
- Do you provide professional services for which an error on your part could lead to a liability lawsuit?
- Do you make products in your home that you are selling to others?
If you think that home business insurance may be a good idea for you, you can consult a local independent insurance agent for guidance and advice.
How Much Does Home Business Insurance Cost in Colorado?
The cost for home-based business insurance can vary from one business to the next because it is calculated according to a number of factors such as:
- The value of your business assets
- The liability risks your business is exposed to
- Whether you have employees, and if so, how many
- Whether you see clients in your home, and, if so, how often
- Whether you travel to different job sites to do your job
- The amount and types of coverage you are buying
- The size of your deductible
In general, small businesses may pay as little as $25 a month for their coverage, while larger ones may spend more than $100 a month.
The only way to find out how much coverage will cost for your home business is by contacting a few competing insurance companies and requesting customized quotes. Independent insurance agents can save you time and money by doing the legwork for you.
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What Does Home Business Insurance Cover?
Your insurance can cover as much or as little as you want it to. An independent insurance agent can help you choose the policies that are a good fit for your home-based business.
Some types of coverage your agent may want to discuss with you include:
- Premises liability insurance: This can cover third-party injuries that occur on your business property. It is particularly important if you frequently have clients coming into your home.
- Product liability insurance: This can cover third-party injuries or illnesses caused by products you are producing in your home, such as if you bake custom desserts and some customers suffer food poisoning.
- Cyber liability insurance: This can cover your liabilities if hackers break through your firewall and access files on your computer. It is particularly important if you are electronically storing sensitive information about your employees or customers.
- Commercial property insurance: This can cover your business-owned property such as furniture, computers, filing cabinets, supplies, and inventory if it is lost or damaged due to a covered event like a fire, theft, or severe storm.
- Business interruption insurance: A major disaster like a tornado or a fire could cause significant damages to your home that could force you to temporarily shut down your businesses until repairs can be made. If a forced closure like this would cause you significant financial harm, you may want to consider purchasing business interruption insurance.
- Inland marine insurance: This can cover your business-owned property when it is in transit or is being used at a job site. If you have a home-based photography studio and you are doing an outdoor photo shoot at another location, your camera and photography gear will be covered while on the job and while in your car while traveling to and from the shoot.
- Workers’ compensation insurance: This can cover the cost to treat worker injuries and provide disability pay. It is mandatory in Colorado if your home-based business employs at least one worker. Most home businesses are sole proprietorships with no employees, so they do not need this insurance.
- Commercial vehicle insurance: This is required if you own and operate any business-owned vehicles. If you use your personal vehicle for work-related purposes, you should notify your car insurance company to see if you can purchase a special addendum so that you are covered if you get in an accident while on the clock.
Depending on what your business does, there may be other policy options you may want to consider. Talk to an independent agent to learn more about your options.
Where Can I Find the Best Home-Based Business Insurance in Colorado?
If you are looking for the right insurance coverage for your home business, look no further than a local independent agent. These experienced insurance professionals can do a complete risk assessment of your business and can recommend the right policies to cover against all of its potential exposures.
Best of all, because they do not work for a particular insurance company, these agents are free to shop around to find you the coverage you need at the most competitive price.
There are more than 250 independent agents in Colorado, so it should be easy to set up a one-on-one consultation with an insurance agent near you.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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