October 23, 2018 11:44am

ortheast Ohioans who operate independent businesses from home are a diverse population from stay-at-home parents to semi-retirees. Some are budding entrepreneurs, and some are earning money doing what they love to do. The bottom line is home-based businesses generate business income. The standard homeowner’s insurance policy covers some business personal property, but it excludes any liability claim or loss arising out of home business operations.

Depending on the size and nature of the home-based business, the business owner may either purchase additional coverage on his/her homeowner’s policy or purchase a Businessowners policy for his/her protection and the protection of the business. Common examples of businesses being operated in someone’s home might be a small home day care, a law practice, a tax return preparation business, a tailor or seamstress, a piano or voice teacher, or someone selling Avon or Mary Kay products. Home-based businesses often have customers coming and going from your home, this gives rise to a liability exposure. Owners of a home-based business also have a business property exposure, the personal property used in the regular operation of the business, such as daycare equipment and office equipment. It is important to carefully inventory both the type of and the replacement value of all business personal property, as the standard homeowner’s policy limits, or may exclude, coverage for business personal property.

If your home is open for business, including on a part-time basis, be sure to budget proper insurance coverage in your home-based business expenses. Three brief examples below illustrate hypothetical claims/losses which could occur in a home-based business setting and which would be excluded under your standard homeowner’s policy:

EXAMPLE 1: A customer leaving your house after dropping off clothing for alteration falls down your front steps and breaks an arm. The customer could file a claim against you for his/her medical expenses, for which you could be liable.

EXAMPLE 2: A child in home daycare is climbing on the swing set in your backyard. The child accidentally falls head first to the ground, suffering severe head injury. If you are uninsured or underinsured, a claim against you by the child’s parents for damages could potentially result in devastation to both your personal and home business finances.

EXAMPLE 3: A storm causes a tree to smash through your picture window, and the tree destroys your $10,000 grand piano used when teaching. Unless you purchased specific property coverage for your piano, it would be lost, and any replacement would be at your full expense.

Home-based business owners need more than standard homeowner’s insurance. Contact your Trusted Choice Independent Insurance Agent at Richey-Barrett Insurance to discuss insurance options.

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