From an insurance perspective it is important for anyone running their business from home to realise it is not covered or has very limited cover under their house policy.
To make business insurance more affordable for people who operate a business out of their residence, many insurers now offer coverage as an extension to the homeowner’s policy.
Since the premiums under these policies are lower than those for stand-alone commercial covers, there are several eligibility criteria:
- the business must be operated by the insured or a member of his or her immediate family residing in the dwelling.
- the business activity itself must be acceptable to the insurer (traditional office-related business, sales representatives and hobbies and crafts are generally in order, but vehicle repair, woodworking shops and business involved in retailing products are usually not).
- only one business can be run out of the home.
Home-based business insurance provides the same protection for business property as your residential policy does for your personal properly. Protection against fire, lightning, explosion, vandalism, water damage theft and so on are included where they are already part of the residence policy.
The Personal Liability Cover included under the household policy is extended to include liabilities arising from the home business operations. The limit of indemnity is the same as that on the household policy but, can be increased to €2,000,000. Professional liability coverage (such as Errors and Omissions or Professional Indemnity), is not however included.
Coverage can be included
for such items as computers, software and fax machines.
Special coverage can also include, accounts receivable, valuable papers, extra expenses, loss of business income actually sustained, and loss of money and securities inside and outside the residence.