Risky Business

Do you need special insurance for your home office?

Dear Janet:

I’ve just started a home business preparing resumes. My customers come to my house for an initial information gathering interview, then return to pick up their finished resumes. The arrangement is working well so far, but I’m a little concerned about what would happen if our house got broken into and my computer equipment was stolen, or a customer fell down our rather steep front steps and got hurt. Will my homeowner’s policy cover these things or do I need business insurance?

–D.W, Syracuse, NY

Dear D.W.:

Right you are to be concerned! Most homeowner’s policies do not automatically cover losses related to business pursuits in the home. Thus if a customer were injured on your property and you were sued, you might have to pay any medical expenses or damages out of your own pocket. Similarly, many policies have only very limited allowances for fire or theft losses to computer equipment used in the home.

The easiest and least expensive way to provide protection against fire and theft losses and to secure coverage for accidental injury to business customers while on your property is to ask your insurance broker to see if the company that issued your homeowner’s insurance will add a business rider to the policy. The business rider (which is also called an endorsement) should be relatively inexpensive (a small percentage of your regular homeowner’s yearly premium), and should give you the same accidental injury coverage for customers as your homeowner’s insurance gives you for household guests or visitors.

The coverage for fire and theft for office equipment including computer equipment may be limited to $10,000 or less and may only cover one computer system in the home. So, be sure to check carefully to find out exactly what is covered and in what amount.

If the add-on insurance available for your homeowners’ policy won’t really meet your needs, you’ll want to look into business owner insurance policies. These may be available from your insurance broker or from a trade association you belong to. The computer protection maybe included or an additional charge. Be sure to check the policy carefully so you know what risks it covers.