If you operate a home business full-or part-time you might be uninsured and not realize it. Many home business owners believe that their homeowner's insurance policy covers all their home business needs. You should not assume that your homeowner's policy would cover your home business. Your homeowner's insurance policy may provide coverage but probably only to a maximum of $2,500 for business equipment in the home and $250 away from the premises.
Your homeowner's policy usually does not cover business-related liability, for example, if a customer or supplier is injured on your property. A homeowner's policy also does not insure your inability to collect your accounts receivable if your business records are damaged, and your policy will not replace lost income if you cannot operate your business due to damage to your home.

There are three ways you can buy home business coverage:

· Depending on your home business, you may be able to add an endorsement to your existing

  homeowner's insurance policy. For example, some insurers offer a home day care

  endorsement for people who operate a home day care service for pay in their home.

· You may also be able to buy several individual business insurance policies to provide the

  various coverages you need, such as business property, general liability and business income

  coverage.

· Some insurance companies have begun to offer what amounts to a mini-business owner's

  package policy specifically for home businesses. Some of these policies cover the loss or

  destruction of business property on or off premises; the loss of valuable papers and important

  business information; personal injury and advertising liability; accounts receivable up to

  $10,000; money lost on premises up to $5,000 and off premises up to $2,000. These policies

  eliminate gaps and duplication in coverage, and the rates reflect the in-home status of your

  business.

The companies that offer these policies often require that you purchase your homeowners and auto insurance policies from them. With these policies in place, your home business policy extends the amount of personal property and liability coverage you have on your home to your business. And if a fire or storm makes running your business impossible, your insurance will cover expenses and lost income for up to a year.

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