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Insurance For A Home Office

If you have a home office, you probably have a desk, maybe a computer, a separate phone line. What else do you need? On CBS This Morning, Ken and Daria Dolan answer that question in one word: insurance.

"Basically, anybody who has a business in their home needs business insurance or at least something added on to their home policy. People don't seem to understand this," says Daria Dolan.

Ken Dolan adds: "The thing is not money. They just didn't know where to find it, or, what kind they needed."
The Dolans also point out that you have to be careful to match the type of insurance to your needs. Homeowners insurance doesn't necessarily cover a home office.

"Your home insurance policy covers your personal property. It does not cover your business property," explains Daria.

For example, if a deliveryman comes up to the front door for a birthday present, trips on the doorstep and sues, your personal liability would cover that.

But if that same deliveryman hurts himself while carrying a product for your business or supplies for your office, you're in trouble. Your personal liable policy will not cover him.

What are the choices for business insurance?

  • The basic package. This is for people who engage in incidental businesses, such as a part-time occupation earning less than $5,000 per year. You can do something as simple as adding an endorsement to your homeowner's policy. That will bump up your coverage for business equipment or equipment on a homeowner's policy, to about $5,000. But your liability is still going to be a small amount.
  • An in-home business policy. This will give you broader coverage. Make sure you have insurance that includes business interruption, loss of income, and loss of equipment. It's tailored for small businesses.
  • The business owner's package policy. It is a great invention that the insurance companies put together. It's for that full-time home office and will give you the biggest protection coverage for all of your equipment from loss, theft, fire, etc. It will give you $1 million in liability and up to $50,000 for property.
The Dolans say that, if all you have as part of your home business is a computer and a fax machine, and nobody is coming to your home as part of your business transactions, your homeowner's policy is enough.

However, for example, if you bake cookies in your home for delivery to outlets in your state, you're going to have to be sure you have a business fire policy attached to your homeowner's policy.

Your liability will also need to be bumped up, especially if you are driving a vehicle to deliver supplies, or suppliers deliver to your home.

Of course, anytime anyone ingests something, you want to be sure you have a good liability policy in case they get a bad batch of whatever it iyou are producing.

Reported by Ken and Daria Dolan
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