Is Your Home Office Properly Insured?
A Homeowners Insurance Policy used to be a fairly simple, straightforward insurance product, and it took care of a fairly simple, straightforward need on the part of the consumer. Times have changed! The home business exposure has broadened to encompass in-home professional offices, e-commerce consultants, medical billing services, interior designers, and canine husbandry.
It would come as a terrible surprise, after a fire loss, to learn that your home computer, which just happens to store some of your office records, is not fully covered, nor are the books comprising your medical library or your file cabinets, because they were part of your home office – a business use of premises.
A similar shock may occur when you learn that your policy will not protect you from the injury suit that arises when a long-time patient in need of a refill trips over your home office threshold.
As a physician, it is very likely you have a home office/business exposure. The basic Homeowners policy limits coverage for “business property” to $2500 on premises, which might not come close to the cost of re-creating your patient database after a lightning bolt, or replacing diagnostic equipment you brought home for safe-keeping, or covering the phone, fax, or e-mail system you have installed in your basement. Even more restrictive, for off-premises business property – such as the laptop you transport from home to hospital – there is only $250 in coverage.
As the needs of homeowners have changed, though, so too has the policy, and there are solutions to the business exclusions built in to your policy. The HO0442 Permitted Incidental Occupancy is generally available for most office situations, and allows your policy to respond to on-premises “business use” losses or liability suits.
Even better are the variety of Home Business Endorsements that are offered by many of the insurance companies. In addition to expanding the coverage for the items in your home which may, even occasionally, be used in conjunction with your work, the endorsements will add some vital enhancements. Coverage for Valuable Papers, Accounts Receivable, Special Computer Coverage, Continuation of Home Business Income, and Protection for Extra Expenses After a Loss are some of the possibilities.
If your Homeowners insurer is not able to accommodate your home office needs, it may be necessary to purchase a separate Business Owners Policy for your home office.
As your home-based business expands in future years, so will your insurance needs. The adequate coverage during your start-up phase could prove insufficient as the value of your business (and your equipment) increases. It is quite possible that you may even outgrow the coverage provided by your homeowner’s policy rider or the Business in Home Endorsement. Your business is constantly evolving, so you should review your policy at least once a year.
— In order to better serve your personal insurance needs, PIAM has formed an affiliation with the WT Phelan Insurance Agency of Lexington, MA. Founded in 1898, WT Phelan is one of the largest privately held independent insurance agencies in Massachusetts and offers a comprehensive range of top-rated products to protect your personal interests.