Being a home based entrepreneur presents certain challenges that no other business faces. You have already determined that you have the mindset to work in this way, Most people think they do but the really do not.

Things can get especially tricky if you are a legal entity. If you are now a LLC as opposed to a DBA or sole proprietor, then you have established your business as a stand alone legal entity and are treated as such by everyone, including the IRS.

This will present certain risk factors for you that will unlikely to be covered under the standard home owner’s policy you may have on the house. If you are a professional and have clients visiting your home office, you will want to consider some liability insurance. What about your office equipment and furniture? Are you operating a larger operation out of your garage? If so, is your equipment and inventory covered? Have these risks been mitigated or transferred?

• There will be a host of potential coverage’s available to you so you will have to huddle with your risk and insurance advisor to map out a plan that works for your situation. Most policies have limitations especially when it comes to determining size. Often that is determined by your annual revenue figures.
• A basic option is a rider or an endorsement. This is additional coverage attached to your current homeowner’s policy. Again, there are certain restriction particularly with regard to yearly income and general risk protection.
• A basic home based policy may cover what you need with regard to liability but many home based entrepreneurs tend to lean toward what is known as a Business Owner’s Policy (BOP). This type of risk coverage is for small businesses that do under $3 million a year. You can tailor it to include liability insurance that could include payments to keep you going in case your income flow has been disrupted by natural causes or fire to your home. Other types of business interruption protection can help you in the case of a particular client being unable to receive your products due to some unforeseen calamity on their end.

The risks faced by the home based entrepreneur are many but with a skilled and experienced risk and insurance advisor on your team, you can be prepared for any sudden calamity.