Finance Blog

Insuring a Home Office

Written by Linda Rey on August 26, 2010 in Insurance  |   4 comments

Insuring a Home Office Over my twenty-five years in the insurance business, I’ve not only become an expert in the ins and outs of insurance coverage, but I’ve also learned a thing or two about being a business owner. As an independent insurance office, Rey…

Insuring your home officeInsuring a Home Office

Over my twenty-five years in the insurance business, I’ve not only become an expert in the ins and outs of insurance coverage, but I’ve also learned a thing or two about being a business owner.

As an independent insurance office, Rey Insurance has a lot of the same needs and concerns that all small businesses have. Running a small business is not just about balancing the books and working with clients. As a small-business owner, you’re responsible for all aspects of your livelihood, including protecting yourself with the right insurance.

Business owners who work out of a home office have a special set of needs to consider. Homeowner’s insurance is not meant to cover the needs and exposures of a business. According to research from the Independent Insurance Agents & Brokers of America, at least 60 percent of in-home entrepreneurs are not properly insured.

You may not think that operating a home office or a home-based business carries greater liability than simply living in the house, but your insurance carrier probably has a different opinion. Most homeowner’s policies limit loss of business property to $2,500, don’t cover losses away from the home, and exclude liability coverage for business-related activity.

Home Office Policy Options

Talk to your insurance agent about adding coverage to protect your home office. Your agent can help you review your property, your existing insurance coverage, and your business needs. You should be thinking about professional liability coverage if a general liability policy won’t cover you. Will you have a lot of clients visiting your office, putting you at greater risk for a “slip and fall” claim or personal injury? Will you need to insure employees? How many employees?

Once you have a good idea of what kind of coverage you need, explore insurance programs through local self-employment organizations and your chamber of commerce.
Here are some of the basic policies you’ll want to consider:

Business Owner’s Policy (BOP): This is the most common policy for small-business owners. It combines major property and liability risks into one policy for small businesses. You can add extra coverage to the BOP tailored for your specific needs. This policy is available only to small businesses that meet certain criteria. Your premium will vary, depending on the type of business you have and what extra coverage you need.

In-Home Business Policy:
An in-home business policy provides more coverage for your business-related equipment and liability that your standard homeowner’s policy. It will protect your papers and records, off-site property, and accounts receivable. Some in-home business policies cover your losses in the event that your home office is damaged to the point that you can’t work in it. Some plans will even cover a certain number of employees. Most insurance companies have plans tailored to the needs of a small-business home office.

Homeowner’s Policy Endorsement: Also known as a “business pursuits” endorsement, this option provides the least amount of coverage. People who don’t run a full business out of their home but who sometimes do business from home usually use it. It’s structured for people who don’t have a lot of costly equipment or customers to increase their liability. For example, a writer who works from home can add a homeowner’s policy endorsement to his or her existing plan to cover extra computer equipment. If you have customers, clients, or delivery people visiting occasionally, you can also add extra homeowner’s liability coverage.

Insurance Coverage for Home Office Equipment

If you have a home office, you may be more accustomed to working in your pajamas than in a suit, but working from home doesn’t exclude you from certain corporate office concerns.

A basic property insurance policy will usually cover losses from fire or lightning, the cost of removing equipment to prevent further damage or theft, and any named perils (hail, civil commotion, and damage caused by automobiles or vandalism, for example).

Coverage for business-related items is probably limited or not included in your homeowner’s policy. Take an inventory of your home office and any off-site equipment you use and determine what additional coverage you need. Here are a few items to consider:

  • Buildings and other structures
  • Furniture, equipment, and supplies
  • Inventory
  • Money and securities
  • Records of accounts receivable
  • Improvements and betterments you made to your property
  • Machinery
  • Data-processing equipment and computers
  • Valuable papers, books, and documents
  • Mobile property, such as cars, vans, trucks, and construction equipment
  • Signs, fences, and other outdoor property
  • Intangible property (goodwill, trademarks, etc.)

As with other forms of insurance, the most important step in choosing the right home office insurance is to honestly evaluate your needs and share that assessment with your insurance agent. Make sure you have the right coverage in place before you need it, and you, your business, and your livelihood will all benefit.

Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.
Follow Linda on Twitter.

Read More.

Flood Insurance: What to do Before, During and After a Flood


  1. Editor, Equifax Personal Finance Blog says:

    "Never really thought about this – I'm going to have to check out my policy."

    Terry commented on this via Active Rain: http://activerain.com/blogsview/1821434/insuring-a-home-office

  2. Editor, Equifax Personal Finance Blog says:

    "Great advice. I would bet if you have an office at your brokers office you would need insurance there also."

    Richard commented on this via Active Rain: http://activerain.com/blogsview/1821434/insuring-a-home-office

  3. Editor, Equifax Personal Finance Blog says:

    "I'll bet many of us haven't thought about this…Thanks for bringing it to our attention."

    John commented on this via Active Rain: http://activerain.com/blogsview/1821434/insuring-a-home-office

  4. Inventory Management Software says:

    I appreciate your post and it was superb .Thanks for sharing.I would like to hear more about this in future.

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Insurance Archive

Stay Informed Sign up for our FREE Equifax email Newsletter