Home business equipment and the homeowners policy

If you run a business from home, a typical homeowners policy provides only $2,500 of coverage for business equipment. Business liability and lost income are separate questions. Ask your agent what your own policy's limit is.

Coverage made for a home business

• A homeowners policy endorsement. It adds to your existing policy and raises the limit for business equipment such as computers. Some insurers also offer a liability endorsement, usually for businesses with few business visitors.
• An in-home business policy. It gives broader coverage for equipment and liability than an endorsement, and it varies a lot by insurer. Many also cover lost papers and records, accounts receivable and business property kept off-site.
• A businessowners policy. It's made for small and mid-size businesses, including a home business that works from more than one location. It doesn't include workers compensation, health or disability insurance.

Lost income

Some in-home business policies pay the income you lose if your home is too damaged to work from for a while. They may also pay the extra cost of working from a temporary location.

Other structures

Other structures coverage pays for damage to freestanding garages, tool sheds and other buildings not attached to the house, and its limit is usually 10 percent of the dwelling limit. If you run the business from one, ask your agent how the policy covers that building and the business property in it.

If you're paid to look after children in your home, tell your agent.

The car

If you use your car for business, such as carrying supplies or visiting customers, check that your auto insurance covers accidents on business trips. Your home or auto insurer can tell you.

An annotated example

What to do next

Ask your agent what your policy's business property limit is, and list the business equipment you keep at home with its value. If you drive for the business, ask your auto insurer whether that's covered.