If you’re running your own business, congratulations! Your entrepreneurial skills are admirable. And if you’re running your business out of your home, you’re in good company. Many other Americans do the same. Unfortunately, many Americans also think—incorrectly—that their homeowners’ insurance policy will cover them for business-related claims.
Homeowners’ insurance is not a misnomer—it’s designed to protect your home. Specifically, it protects your home and property from damage, loss or destruction, and it also covers liability for any damage that occurs on your property. It does not, however, cover your business needs and liabilities.
On the other hand, a business owner’s policy (BOP), at a basic level, provides the following:
- Property insurance for your buildings and the assets within them (with the exception of home-based businesses. Your homeowner policy will cover the building – depending on what type of business you are running from it.)
- Interruption insurance, which compensates you for loss of income due from covered losses.
- Liability protection, which covers your company’s legal responsibility for bodily injury or property damage that occurs as part of your business operations
Many insurance companies offer policies that combine all of the above into one package. You can also purchase these policies separately. Keep in mind that BOPs do not cover things such as professional liability, auto insurance, worker’s compensation or health and disability insurance; you’ll need separate policies for those. Fortunately, there are coverage options available for every type of business situation and risk you might face.
Your AAA agent can advise you on the type of coverage that is appropriate for your particular business needs and level of risk, so give him or her a call today.