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Liability Insurance is probably the most important area of business ownership that is almost always overlooked at the outset. Most people running an in house business think that their great homeowner’s insurance policy will cover them if anything should happen. I implore you to take a look at your homeowner’s policy because this is almost never the case. Insurance companies are very savvy to what people may do in their homes and protect themselves, often times in several different clauses, from the liabilities that are associated with any home food business.
You may also think you do not really need insurance, but think hard about that decision. What happens if you have a fire in your kitchen? What if one of your customers/clients happens to get food poisoning? What about an accident during the transport of your food product? Your homeowner’s policy will likely not cover you for this type of damage. Unfortunately, this leaves you and your family’s personal assets exposed to the entire liability for injury and damages that you cause. You may also think that you will be able to get your claims past the insurance adjuster without any problem even if it was technically in the operation of your business. Trust me, insurance companies and their investigators know every trick in the book. They will not be easily fooled and you will probably end up the fool without the proper coverage.
Considering the potential liability and the relatively low cost of the coverage it is just inexcusable to not have the proper coverage in place. In some cases you may be able to add a simple endorsement to your homeowner’s policy. This can cost you as little as $25.00/month. However, your insurance company may require you to purchase an In-Home Business Policy. Costs of this type of policy vary by business type and insurance company. Finally, you can also get coverage by taking out a Business Owners’ Policy which is usually designed specifically for small to medium sized businesses. You will need to make an appointment with your insurance agent to discuss all of your options fully before making a coverage decision.