HOME-BASED BUSINESS INSURANCE

Since the insurance on your home is not designed to cover business activities, you can jeopardize your coverage by conducting any sort of commercial venture there. Your homeowners policy contemplates that you’re going to use your dwelling “primarily as a private residence,” although you’d probably get by with minding the neighbors’ children now and then for a fee or with using your den to write a book in your spare time.
More elaborate business operations may require special coverage, and you can get that by adding an inexpensive endorsement to your homeowners policy. The endorsement is intended for professional people, such as doctors, dentists, lawyers and accountants, who have their offices in their homes, or for anyone who operates a private school or a studio at home. If you conduct such activities in your house, talk to your insurance representative about the endorsement. The loss to you in case the office burns could be devastating without proper coverage.

For example, there was the case of the Virginia resident who operated a recording studio in his home, where he had about $100,000 of equipment for business purposes. He should have taken out a commercial policy.

Any business use of your home - even to give dancing or music lessons - could affect not only the insurance on your dwelling, but the coverage of your personal belongings and your liability to others. If you plan to use your home for any such purpose, the sensible approach is to talk with your insurance representative about it in advance to make certain you won’t forfeit any of your insurance protection. Don’t forget; they’re your dollars. Make sure they buy the right protection.

Business means any trade, profession or occupation.

Business activity is any agreement, contract, transaction or other interaction that advances your occupation. These terms are important because, in most cases, homeowners policies limit coverage for businesses and business activities.

In a standard policy, business-related property is insured up to a few thousand dollars. Business-related liability is more complicated issue. Liability coverage for business-related activities is strictly limited. Any significant business exposure should be covered under a separate commercial policy.

Please note that the precise coverage afforded is subject to the terms, conditions, and exclusions of the policy as issued. This explanation is intended only as a guideline. This information is not intended to be considered investment, tax or legal advice. It is provided, for your education only. This is not an insurance contract. All terms and coverages are defined solely by your policy.

For more details, please call a PaulBalep representative toll free 1-800-964-8614 to receive a free, no-obligation quote. Like so many satisfied clients, we think you’ll be happy you did. And to set up a meeting to discuss additional insurance and financial goals: Visit us online at www.paulbalep.com, or e-mail us at info@paulbalep.com.

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