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As with all coverages, the homeowners policy has exclusions. Business use is someting easily looked over but
should be of special concern when one decides to start a homebased business. It is no different than hiring out your personal
auto as a taxi, if someone paying you is hurt in your vehicle the private auto policy excludes that situation from coverage. You
are required to tell the insurance company about the intended use of the vehicle.
The same applies
to your home. Even if you know your rate will go up for business use of your home, you are required to inform the
insurance company. If you think you will save money by not telling the company, you're taking a big risk. Something
as low key as some kind of sewing service and a client comes over to pick up their item and falls. If that person sues
you, your homeowners policy will not cover that king of incident the same as if friend came over for tea and the same
injury occured. The focus is that a business ran out of your home increases the traffic to the house and that is an additional
risk to the insurance company.
It should be weighed if it is worth running a business from your home
if it is not profitable enough to pay for business insurance. If the business is legitimate there are tax deductions
for all operating expenses anyway.
Your homeowners policy does not consider loss of service for equipment
you may need for operating the business like a business owners policy will. Talk to your home insurance agent to see if
there is a rider that will extend coverage to the operation of the business. The cost may be the same as a seperate policy
but this will give you one bill to pay. Purchasing a business owners policy will only enhance coverage at your home
the insurance company will not cancel your homeowners policy because you have a business owners policy. Unlike not telling
your insurance company you are operating a business out of the home which can possibly void the homeowners policy. You
should be aware that not having insurance does not release the responsibility to pay. A situation can be serious enough that
someone can end up owning your home. This is too much of a risk just to avoid paying as little as $1000 dollars a year. If
the business is not producing enough to pay that small amount then what's the use?
If nothing else translates
from this page let the idea of keeping inportant information like the use of your home from the insurance company, is a bad
idea.
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