Home Business Insurance – What Are Your Assets?

Home Business Insurance - What Are Your Assets?

Below is one of the best articles we have ever read on the subject. It lays everything out nicely, it’s easy to read, and, understand, it touches on all of the key issues, and, best of all, when you have finished reading it, you will definitely know which is a very good direction to take given your circumstances.

Identifying the Assets of a Home-Based Business for Insurance Purposes

Distinctive Title

There is a lot to consider when you are running a home-based business, and insurance is one major issue. You need to dot all of your Is and cross all of your Ts to ensure that you can get the money you are investing in if disaster strikes. This article will each you how to identify all of your assets for insurance reasons.

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The first step is always to contact your insurer to find out what coverage you have within your homeowner’s policy. It is likely that you won’t have much if any coverage of your business equipment, which can be thoroughly disappointing. Next, ask whether or not they offer home business insurance. If so, you may be able to bundle your policies and therefore get a great deal. You should still do some comparison shopping with other companies to ensure you are getting the best premiums and coverage available.

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Start a list of the things you use for your business, called property. For example, your computer, your monitor, your phone, your desk, your chair, your filing cabinet and your printer. Make your list extremely comprehensive and include model and serial numbers. Keep the receipts for anything you are using for your business. Also, take a photo or video of your home office if possible. Put all of this information onto a USB key or CD and put it in a safety deposit box or safe.

Search Engine Optimization

As you create your list, determine how much of the use of the item is for your business and how much is personal. For example, if you entertain clients at your home, then your coffee maker will count as a business item. That said, if you only have clients over 10 times a month, you can only claim 30% of its value. If it is under 51%, then it doesn’t count.

Search Engine Results

Look at each item on your list and determine if it is both ordinarily used in your business and if it is a necessity. For example, your television isn’t both ordinarily used and a necessity if your business is web design. It would be for a daycare or video editing company, though.

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Do you have any property elsewhere other than your home? Off-site property can be covered, such as purchases of stock which haven’t arrived yet. You can get additional coverage for these items and anything you have in storage, SEOsuch as large equipment.

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Now that you have all of this information in order, talk to your insurance agent. He will be able to get you the best coverage at the lowest rate from a trustworthy company. He is on your side, so make the most of his services.

Web Users

Insurance is a complicated topic for sure, but a bit of knowledge goes a long way. When you are able to use the tips in this article as a step by step guide, you will be able to get your insurance ducks in a row. Being protected when the worst happens will give you a great deal of peace of mind.

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32 Responses to “Home Business Insurance – What Are Your Assets?”

  1. Bekah Reply

    I Am Looking For A Good Home Based Business Opportunity That Doesnt Require A Large Out Of Pocket Expense? I get alot of email offers but I cant tell which ones are scams and which ones arent. Does anyone have,or know of a good home based business opportunity that I could do off of my computer? I just dont know where to even start looking.Thanks alot!!

    • Hi Bekah! I’m a mother of two with one on the way. I’ve had my own home based business with Arbonne International since April of 2006. It’s only $29 to start with no monthly requirements, obligations, inventory, mandatory meetings, or minimums. Arbonne has a simple successplan with one of the most generous compensation plans in the industry. Anyone to do this business! It’s really easy and a lot of fun!

      There are 7 avenues of income including 35% – 80% Retail Profit, Bonuses, Mercedes Benz Program, Overrides, Life Insurance Benefits, Travel Opportunities, and Monthly Campaign and Incentive Programs.

      I would be happy to share more about what I do with you. If you have any questions or would like further information, please do not hesitate to visit my website or email me and I’ll be happy to help you.

  2. Wendling Reply

    How Do I Find Square Feet Of My Home For The Insurance Purposes? Here is my Parcel Identity R72-052-12-0025 This is for the Insurance quot purposes.

    • You might want to delete this question because of the parcel identity. That isn’t something you really want to share (expecially if it is true).

      Anyway, for a very rough estimate of square footage, measure the width of your house outdoors and multiply it by the length of your house. If you have additional floors, double the number.

      For a more accurate number, check your mortgage paperwork.

  3. Frosted Reply

    How Do I Get Business Liability Insurance For A Start Up Business? I’m starting a cosmetic’s company and the manufacturing company I’m hoping to work with requires business liability insurance. I have no previous payout or income from the my start-up company as of yet. What would be the best way to go about getting this insurance, seeing as most companies require the company to be already off the ground with revenue and mine is in the developing stages?
    Thanks in advance

    • You need to contact an agent that specializes in placing commercial insurance. You might want to start with the agent that writes your other insurance (auto & home) but don’t be surprised if they don’t have a market for this type of risk. Very few insurers are going to be interested in underwriting this type of risk.

      If your agent is unable to assist you ask him/her for a referral to an agent that deals with specialty line carriers. The bad news is that the minimum premiums for general liability and products liability for a cosmetics company could easily exceed $10,000.

      No shortcuts here, you have to contact an agent that deals with surplus lines carriers.

  4. Trevor w Reply

    Can Anyone Recommend An Insurance Company That Doesn’t Discriminate Because You Are 50? My partner and I are planning a Gap Year backpacking trip for a year, and are fed up with beinig told for insurance purposes that we are too old at 50, bloody cheek! Can anyone recommend an insurance company that is cheap, but more importantly won’t pile silly money on to our policy?
    Thank You in advance.

    • RIAS and Saga should both give you quotes and you can compare one with the other to see which is the best deal. Age Uk should also be able to give you a quote through their facilitator.

  5. Somegirlie Reply

    How Much Percent Of Jewellery Appraisals Should I Expext If I Sell To A Jewellery Buyer? I know appraisals are inflated to the maximum for insurance purposes, and that If I sell jewellery, I cannot expect them to pay the full appraisal amount to me.

    But how much should I expect? Not from a pawn shop, but from a jewellery/gold/silver buyer.

    Half the appraisal? One third?

    • My experience is about 1/3 to 40% absolute maximum

  6. Highcap10 Reply

    Can I Use Landscape Timbers To Put A Skirting Around My House? I need to put a skirting around my house for insurance purposes, and dont like that cheap looking vinyl skirting available. i was wondering if i could stack up landscape timbers around my house, and if so how would i attach them together? has this ever been done? the highest point of my house is 20 inches.

    • The only drawback will be termites. Wood against dirt is a really bad idea. Its like an invitation for rot and creepy crawlies.
      Good luck

  7. Anonymous Reply

    Rear End Collision, Who’s At Fault For Insurance Purposes.? Driver at rear does not get a ticket, but front driver gets a ticket, who’s at fault in the eyes of Insurance.
    Front driver made a sudden stop with no emergency lights on middle lane of Expressway. Rear driver coming at 80kms per hour applied brakes but still collided with car. Police officer gave ticket to front driver but not to rear driver. Does that mean Insurance also would consider front driver at fault.
    But why police did not give rear driver a ticket.

    • Generally the person in the rear is at fault but since the officer gave a ticket to the front driver the person hitting the front car would probably be considered about 20% at fault due to the short following distance and the insurance rates should not be raised. Depending on the insurance policy they might need to pay the deductible before the insurance kicks in.

  8. Aredsailjunk Reply

    How Is The Value Of A Gun Collection Determined For Insurance Purposes? My bud is in the market for first home and moving from Old Family Place.

    He inherited many guns from his Father who was a Gunsmith and a collector /trader and that man had also inherited a number of guns himself from other family member`s .

    Goes from Revolutionary War to Vietnam + other conflicts —-hand guns and long guns -plus one`s my friend has gathered along the way .

    Are there special insurance companies who cover collections besides the NRA ?

    Should each firearm be photographed and a itemized list made , if so what info on this list ?

    Should these be considered as part of contents when he gets home owner`s insurance and really up the home content`s amount and leave it at that ?

    At present , they are just in many cabinet`s and a few in safes and not noted on the Family Home insurance .

    What security system is the preferred choice of fire arm collector`s ?

    Any other step`s he should take ?

    He has been looking for home with completed nice basement for extra security purpose and because he really likes to see a lot of these displayed , but not too many home`s built with basements in that remote area.

    Safe room added or ???

    All info/ suggestion`s appreciated – want to do this the best/safest way right from the start.

    Thanks !
    Thanks to all who responded, we now have the fact`s of what we need to do.

    And of course, nothing is going to make a collection 100% safe as so well pointed out, especially from fire.
    Am contacting our favourite local gun shop as to the best appraiser to come out and get this started ASAP.

    • I am a long time Alaskan hunter, trapper – and I design high tech CCTV and Security systems for government, military, and large corporations all across Alaska.

      What your bud needs to do is catalog each firearm, photograph it, and get an estimated appraisal on them.

      A normal homeowners policy will only cover up to $1,000 in firearms. Above that, you need to present the Insurance company with the make, model, condition and estimated value. These firearms go on ‘schedule’.

      Scheduled firearms can be scheduled several way. They can receive fire + theft insurance (this is what I recommend) and is the least expensive. The other choice is called, “all harm”and is what hunters use for expensive guns – it covers all possible losses from fire, theft, damage, and falling into the lake.

      What you get from the insurance company when making a claim depends on how you presented them with proof of value. Say you have an 1861 Colt pistol in excellent conditon with original wood case, manual and sales receipt – that 150 year old original box, manual and sales receipt is worth as much as the gun – if not more! If you simply insured the gun – listed it as an 1861 Colt Pistol in EX conditon – the insurance company will replace it……… but not the other goodies. This is where having an appraisal of the firearm and it’s accessories becomes important.

      Displaying firearms and security never, ever mix well. What you need is a small room or large closet that has double walled 5/8″ sheet rock. Double sheet rock will protect the collection from fire. If you put mesh hog wire between the sheets – it will definitly slow down an intruder.

      For an alarm system – surf on over the Sensorphone.com this is a great product. It is a small grey box that connects to power, your phone line, and sensors – motion, intrusion, sound, and temperature – that monitor the home of office. If something goes wrong – it will call you and use it’s voice chip to tell you exactly what is happening, plus, it will let you listen to what is going on. If it gets too hot or cold – or someone breaks in – it calls you – and goes down a list of numbers until somone gives it the secret pin number. If you are concerned about your house – you can call into the unit, it will answer the phone, tell you the state of all the contracts, what the temperature is, how hot and cold it has been – and then let you listen in for 20 seconds. They cost between $400 and $600 depending on features – they are affordable – and perfect for do-it yourselfers. They are not rocket scientist things to install and make work.

      Hope this helps.

  9. Wiccitywack Reply

    Canada Home Business Question? Hi!

    I am starting a home based business in creating and selling all natural skin care products from my home in Canada. I was hoping someone might be able to direct me to some site outlining the legalities of doing this? I have looked all over and cannot find if I need to purchase insurance, licenses, etc….

    Thanks!!!

    • Me too doing a home business on natural skin care products in Canada and I would like to help you with your needs. For more details contact me privately on my e-mail: rasathie11@yahoo.com

  10. Sky I Reply

    My Home Insurance Company Is Terminating My Policy Because I Need A New Roof? My home insurance company sent me a letter saying they are going to terminate my policy in few weeks because the roof is worn and needs to be replaced, but I bought my house a year ago and it passed inspection and my inspection paper says i have 3 to 5 more years left on my roof so i don’t understand why or how my home insurance company can just terminate my policy. By the way the home insurance company is TRAVELERS if that helps.

    • Your home insurance company can terminate your policy for pretty much any reason. In your case, they have chosen to terminate because from their point of view, you are at risk for needing a new roof and damage to your roof can occur by a windy day or heavy rainfall. Contrary to what most people think, insurance companies are in the business of selling insurance policies and collecting on the premiums. They are not in the business of paying out claims. The fact that your inspector says you have 3 to 5 more years left on your roof is not something your insurance company cares about. All they care about is that in their eyes they may have to pay for roof repairs at some point in the near future. How does Travellers know the condition of your property? Did they send someone out to look? Do you live in a tornado or hurricane area? If you read your policy, chances are you’re not even covered for damage to your roof due to things like tornados, hurricanes, etc. Also, 3 – 5 years left on a roof is not a long time — It would be better to make repairs or replace the roof now instead of deferring maintenance after it’s already too late. I say you shop around for a new insurance company, get your roof fixed/repaired/replaced and look at it as the price of owning your own home. It sucks, I know, but that’s the way it is. Good luck!

  11. Dono Reply

    Purpose Of Limited Premium Payment Life Insurance? What is the purpose of limited premium payment term life insurance? Is it so that the insurance companies can get hold of your premiums over a shorter period, or does it actually work out cheaper in the longer term for the policyholder? I appreciate that you may chose the premium term to be limited if you are close to retirement, but let’s ignore that case for now.

    • When it comes to term insurance I know of nothing that is limited pay. Term insurance is “renting” your insurance and you pay on a monthly, quarterly, or annual basis (It is often cheaper to pay annually.) until the 10-year, 15-year, etc. term is up. After that period the insurance is gone.

      Often times limited pay is spoken of when dealing with whole life insurance, or other kinds of permanent insurance, like variable, whole, and universal. I’d run the numbers for your situation, but it should be cheaper, but that doesn’t mean you should do it. Consider the interest you can get on your money in a life insurance policy. For whole life, it’s probably around 3%. For variable life, maybe 8% overtime. My point is this: where do you want your money tied up? If you like the guarantees of whole life insurance and the guaranteed cash values, great, but a CD can offer that same benefit, less the death benefit of many times the cash value of course. Same with the variable insurance, you may get a good return, but you can also get that through mutual funds or stocks.

      Hope this helps.

      Best,
      Anna

  12. Procastinating lazy liars Reply

    What Is Life Insurance? Life insurance is suppose to be used as a protection of income. In case you die, your family is protected from devastation of substantial income loss. But, many insurance companies are selling it as an additional source of income or as an investment, which is really is not. Therefore, many families who have life insurance are underinsured because these cash value life insurance are very expensive.

    If you are using life insurance solely for the purpose of saving up for a goal or emergency, why aren’t you investing it in mutual funds or put it into an IRA? If you are afraid of the stock market, then open a money market account. If you are saving up for your kids education, then open a 529 plan. All these alternative ways are better than keeping your money in a life insurance because you never have to pay it back if you use them. As to life insurance, if you use any of the cash value, you will have to pay it back with interest.
    So I’m asking, what is the real definition of life insurance? What is its purpose? Why do many companies tie savings with insurance together instead of keeping them separate?

    • The problem with life insurance is that people don’t fully understand it, so they believe everything the life insurance agent says.

      Life insurance is suppose to be use as a protection of income, not as a tool to use for future goals. Reason why many life insurance companies sell cash value products is because they are more profitable than to selling term.

      The problem with cash value is that when you die, your beneficiary will get the death benefit, but not the cash value. If you live to age 98, you are no longer covered, but you get the cash value. How many people do you know that actually live to age 98? Of those people at age 98 or above, how many are actually sane enough to know they even had life insurance in the first place?

      You are correct that investments should be kept separate from life insurance, but the insurance agent is not going to show the client why it should be kept separate. Buying term and investing the difference is the most cost effective thing a person can do. Check out this blog about the cost between term and whole life: http://obe231.blogspot.com

      When people read that blog, buying term and investing the difference would make more sense.

  13. Gojo96 Reply

    Business Insurance Vs Home Insurance? I started a business out of a residential home I bought. The business is seperate from my home. So I rent the home to the LLC. Yet, my insurance provider which insured it previously as a rental is saying I have to insure the whole thing as a business. But I don’t get it. What if I was renting it to someone else who had a business? Why would they be responsible for insuring the home and not just the business. As I said the business is an LLC and does not claim the home as an asset. Why can’t I just get liability insurance for the business and a basic home insurance for the house? Bottom line I am worried that if I insure the whole thing under business insurance and if someone sues the LLC one day they may look at my home as an asset of the LLC. I did buy the home in my name not the business so don’t know if that will protect my home.

    • If you were renting the property to someone who was using it for business purposes, you have to insure the building commercially, NOT on a residential property policy.

      It doesn’t matter if you’re an LLC, there are DIFFERENT LIABILITY AND PROPERTY exposures for a business, or a residence, even a residence rented to others as a residence.

      Without having a CLUE what type of business it is, manufacturing and/or storing certain materials is MUCH more hazardous than living in a house – not to mention, with a BUSINESS, there are blocks of time (holidays, evenings & weekends, etc) when NO ONE IS THERE. More so than with a residence.

      Lastly, with a business, then you have the people factor – you have employees going in and out, and possibly clients going in and out, DRASTICALLY increasing the trip and fall hazard.

      Regarding the liability protection, consult an attorney to be sure you’ve structured things correctly.

  14. Michael Reply

    For Medicaid Purposes, Are Life Insurance Proceeds Exempt? I’m in PA. I received money from my mother’s life insurance policy when she died.
    I’m trying to qualify for Medicaid, will having this money (over 2,000.00) disqualify me?

    • No generally life insurance benefits paid to “first class” beneficiaries such as yourself are not subject to third party or creditor claims under section 101 of the IRS code.
      If the insured is alive and pledged cash value in the policy for a loan however those cash values are subject to seizure in the event of default and may be considered an asset by Medicaid if disclosed.
      The medicaid questionnaire on disclosure of assets does not ask about life insurance policy cash values but does ask about annuities and retirement programs.

  15. Dono Reply

    Purpose Of Limited Premium Payment Life Insurance? What is the purpose of limited premium payment term life insurance? Is it so that the insurance companies can get hold of your premiums over a shorter period, or does it actually work out cheaper in the longer term for the policyholder? I appreciate that you may chose the premium term to be limited if you are close to retirement, but let’s ignore that case for now.

    • When it comes to term insurance I know of nothing that is limited pay. Term insurance is “renting” your insurance and you pay on a monthly, quarterly, or annual basis (It is often cheaper to pay annually.) until the 10-year, 15-year, etc. term is up. After that period the insurance is gone.

      Often times limited pay is spoken of when dealing with whole life insurance, or other kinds of permanent insurance, like variable, whole, and universal. I’d run the numbers for your situation, but it should be cheaper, but that doesn’t mean you should do it. Consider the interest you can get on your money in a life insurance policy. For whole life, it’s probably around 3%. For variable life, maybe 8% overtime. My point is this: where do you want your money tied up? If you like the guarantees of whole life insurance and the guaranteed cash values, great, but a CD can offer that same benefit, less the death benefit of many times the cash value of course. Same with the variable insurance, you may get a good return, but you can also get that through mutual funds or stocks.

      Hope this helps.

      Best,
      Anna

  16. Mommy of 6 Reply

    When Is A Puppy Classed As An Adult Dog? Random But Need To Know For Insurance Purposes!?

    • For insurance purposes, 12 months.

      For other purposes, it depends. Dogs attain their full size at 7-24 months of age (large breeds take longer) and achieve sexual maturity at 5-9 months (males) or 6-14 months (females). Some breeds may not reach emotional maturity and adult energy level until they are 3. For those with working dogs like hunting hounds or sled dogs, it is often useful to designate between “yearlings” (1-2 years old/ first working season) and “adults” (over 2 years/have worked for 1 or more working seasons) – some even further designate “two-year-olds” from adults.

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