What are the three options for insurance for home-based businesses? W

QUESTION

What are the three options for insurance for home-based businesses?

What will be an ideal response?

ANSWER

Answer: (1) Add a rider or endorsement to your renter’s or homeowner’s insurance policy. (2) Get a home office policy (HOP), a combination of a homeowner’s policy and a business insurance that eliminates duplicate coverage or gaps. (3) Get a business-owner’s policy (BOP), which protects you against various kinds of liability, as well as damage to business property.
Explanation: If you start a business in your apartment or in a spare bedroom in your house, you should know that your standard renter’s insurance or homeowner’s insurance probably won’t provide you with enough coverage. Indeed, most homeowner policies limit business losses to $2,500, don’t cover losses away from home, and exclude liability coverage for business-related activity.