How to Get a Businessowners Policy (BOP) for a Home Business

If your home business operates both in and out of your house, a business owners policy (BOP) may be the best home business insurance policy type for you. A BOP for home business is a business insurance policy that covers your business property and equipment even when they are at a location other than your home. A business owners policy also covers the additional liability risks associated with operating a business in more than one location. BOPs may also include coverage against loss of income.

Difficulty: Easy

Instructions

Things You'll Need:

• Calculator
• Existing insurance policy (if any)

Review Your Business Activities

1. Create a list detailing the types and amounts of inventory that your business typically has on hand. Because a business owners policy is a package, it automatically includes coverage for inventory. Home businesses that offer services rather than goods may not need broad BOP coverage.

2. Calculate the cost to your home business if a disaster caused operations to stop. BOP packages include business interruption coverage, so knowing what expenses your business would continue to accrue will help you choose the correct amount of coverage. Include an estimate of your potential lost profits too, as many business owners policies will cover this as well.

3. Get all of your existing business insurance together. Review your existing policies so that you can avoid redundant coverage when shopping for a BOP.

Research Insurance Policy Providers

4. Speak to your homeowners insurance company about a BOP. Most insurance companies now offer BOP package policies for home businesses. Ask the agent if you would get a discount in the price of the BOP premium if you purchase a policy with them.

5. Go to your local chamber of commerce and ask about business associations in your area. Small business associations may have business owners policies negotiated at a group rate.

6. Visit insurance agents to discuss home business BOPs. Bring your business records with you so that you can speak in detail. Ask each agent to provide you with a written description of the policy they offer, along with the price.

Tips & Warnings

• If you live in an earthquake prone area, ask your home business insurance agent about adding earthquake coverage. Business owners policies do not include coverage for earthquake damage.
• Get an add-on auto policy to your BOP if you or your employees use vehicles for business purposes. Neither BOPs nor your personal auto insurance are likely to cover accidents while the car was being used for business.