Most homeowner or renter insurance policies will not cover equipment or supplies used in connection with the operation of a business in the home. Your insurance company will want a separate rider on your policy to cover loss or damage to your business-related equipment. Additionally, if you invite customers or clients into your home for business, if they get hurt while on your property there’s a good chance your liability policy isn’t going to pay the bills.
Protecting yourself against potential liability should be a consideration for people operating a home business. Persons who perform work for others in their home or place of business find that insurance is a necessary part of doing business and unless you can show proof of insurance, most companies won’t let you in the front door. You should have the same opinion about those who do business with you.
Another consideration for operating a business, in the home, out of the home or even as a free-standing business is insurance that protects you against the loss of business through no fault of your own. For example, there is a major storm and while you suffer no damage or loss at your home or place of business, you may be forced to close due to lack of electricity or gas for heat for several days. Business interruption insurance can help keep other bills paid while you sit idly by waiting for the power to come back on.
Depending on the policy you choose and the insurance company is willing to write, it will usually require detailed records about your earnings history. When you make a claim for loss of the ability to conduct business, you will have to prove what your history of income has been for a certain amount of time. Many business interruption policies will want to see at least one quarters worth of records, or 13 weeks, to make a determination of what their liability may be.
They also will want this broken down by day. For example, it may not be enough to show that your business has averaged $1,000 a day for the past 13 weeks. If you're out of business on a Monday, Tuesday and Wednesday, they will want to see the average income for the past 12 Mondays, Tuesdays and Wednesdays. If the bulk of your income is realized on during the weekend, you may be disappointed in the insurance company’s claim pay out.
Your home car insurance also may not cover you if you use your private vehicle for business purposes. If you are delivering an order to a customer, that is business-related and if you wreck your car, or worse injure someone else, your insurance company may refuse the liability unless your policy includes business use of the vehicle.
Together we shall win,
Adesegun Akitoye
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