• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Wealth Pilgrim

No Money Worries. No Matter What.

Neal Frankle featured in
  • Home
  • Life Insurance
  • Investing
    • Build Strong Investment Building Blocks To Avoid Going Broke In Retirement
    • Systematic Mutual Fund and ETF Investing
    • Stock Market Investing Guide
    • Choosing the Right Investment Brokerage Guide
    • How Bonds Work Guide
    • How Banks Really Work Guide
    • Annuities – What You Need To Know Before You Invest
    • A Beginners Guide To Buying Individual Stocks
    • Create A Pool Of Great Mutual Funds and ETFs To Pick From To Secure Your Retirement
    • ETF and Index Fund Investment Guide
  • Earn More
  • Banking
  • Retirement Planning
    • Retirement Guide
  • Reviews
    • Upgrade Personal Loans Review
    • Lending Club Review
    • Prosper Review
    • Ally Invest TradeKing Review
    • CIT Bank Review
    • LegalZoom Review
    • Lexington Law Review
    • Airbnb Host Review
    • Should You Drive For Uber?
  • Tax
  • Courses
    • Raise Your Credit Score So You Can Buy a House – Free Video Course

Home-Based Business Insurance – What Coverage Do You Need?

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

If you are in business for yourself and don’t have the right home-based business insurance coverage, you could face huge risks. I don’t care if your company is an LLC, Professional LLC, C or S Corp or Sole Proprietor. Home-based business owners owe it to themselves and their families to have the right insurance. And you have to protect your business and yourself with the right insurance at the cheapest possible price.

How?

First, don’t make the mistake of thinking your homeowner’s policy covers you because (in most cases) it doesn’t.

Your homeowner’s insurance doesn’t cover structures used for business purposes. So if you have a fire in your home office, you might not be covered. What if that fire spreads to the rest of your house? How will that “business fire” impact your homeowner’s coverage? Do you want to take the chance of finding out?

On top of that, your homeowner’s policy only covers a small amount of business personal property – and it doesn’t cover data whatsoever.

Let’s keep going. If a client gets hurt when they visit your home office, you’re not covered. Even if a non-business visitor gets hurt at your home while you’re conducting business, there may be no coverage.  That could be expensive.

The list goes on and on.

I know how much work it is to launch a successful small business. I don’t want you or anyone else to go through all that trouble and then lose it all because you don’t have the right home-based business coverage.

What insurance coverage do you need if you operate a home-based business?

1. Loss-of-Income Insurance

2. Business Personal Property Insurance

3. Personal and Advertising Injury Insurance

4. On-Premise Liability and Off-Premise Liability (Read Liability Insurance for Small Businesses for more information.)

5. Errors and Omissions Insurance (for certain types of business)

How can you get the coverage you need at the lowest cost?

You have three alternatives:

1. Endorsements

You can simply add a rider or endorsement to your homeowner’s policy. This is the least costly way to go. Unfortunately, it also offers the least protection. You have to consider the type of business you run and the real risks.

If you are a service provider and don’t see clients in your home, this might be the way to go. But if you create products, have employees and/or see clients in your home office, it probably isn’t a good choice.

2. Home Business Policy

This is the next step up from an endorsement. This covers business and personal liability, loss of income and damage from fire and theft. This policy can cover you for loss of income, business expenses, equipment and data.

It also can provide coverage for injuries caused by your product or service. You can buy these policies from companies that sell homeowner’s insurance as well as from companies that specialize in home business insurance.

3. Business Owner’s Policy

This is the most comprehensive coverage you can buy. This insurance often covers business structures, property, equipment, data, loss of income, loss due to fire, crime or theft, personal injury.

If you sell and/or manufacture a product, have employees, have clients visit often or any combination of the three, this might be the best choice.

What is the best way to keep your premiums low?

There are a number of ways to get cheap business insurance with premium carriers. Get lots of quotes. Talk to different companies. Don’t make the mistake of thinking that the person who sells you homeowner’s insurance is the best source for your business insurance. Your agent may or may not know anything about business insurance or the risks you face as a business owner. Talk to lots of companies. It doesn’t cost you anything and it may save you a fortune.

And remember, the cheapest policy isn’t always the best. Make sure you compare apples to apples. Make sure the quotes you get are for the same coverage.

Once you know what coverage you need, consider getting a higher deductible. That will save you money.

And ask the providers if there is something you can do to reduce risks (and thereby reduce the premium). Would you save money if you put in an alarm system? What else can you do to reduce the cost?

Remember that your insurance needs are going to change over time. Don’t become complacent. Review your coverage each year. Make sure your coverage is adequate, but at the same time make sure you’re not overdoing it. Cancel insurance if you no longer need that coverage.

Talk to competing companies each year as well. It will take a little time. But it might be the smartest thing you do to safeguard your business, home, retirement and family.

 

Tweet
Pin1
Share

Reader Interactions

User Generated Content (UGC) Disclosure: Please note that the opinions of the commenters are not necessarily the opinions of this site.

Comments

  1. Simplyforties says

    August 15, 2010 at 11:54 AM

    Good advice but, “Do you want to take the chance to find out?” is a bit alarmist. Couldn’t you just call your insurance agent and ask if you were covered?

    Reply
    • Neal Frankle says

      November 1, 2011 at 6:05 PM

      Fair enough Mary. Good point.

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Are You Human? * Time limit is exhausted. Please reload CAPTCHA.

Primary Sidebar

Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
Read More »

Stay Connected

Facebook Twitter YouTube RSS
We are on YouTube
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

More Categories

Career Development
College Funding
Credit Cards
Credit Score Fixes
Money and Marriage
Debt Relief
Estate Protection
Property Investment Loans
Small Business Strategies
Spend Less Money
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

Disclaimer

Wealth Pilgrim is not responsible for and does not endorse any advertising, products or resource available from advertisements on this website. Wealth Pilgrim receives compensation from Google for advertising space on this website, but does not control the advertising selection or content. Please do the appropriate research before participating in any third party offers. The information contained in WealthPilgrim.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. Wealth Pilgrim does not provide investment advisory services and is not a registered investment adviser. Neal may provide advisory services through Wealth Resources Group, a registered investment adviser. Wealth Pilgrim and Wealth Resources Group are affiliated companies. In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving payments,access to free products and services for product and service reviews and giveaways. Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.


About · Contact · Disclaimer & Privacy policy

Copyright © Wealth Pilgrim 2023 All Rights Reserved