First Person: Do I Need Business Insurance for My Home Office?

C. Jeanne Heida

*Note: This was written by a Yahoo! contributor. Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

Have you recently started working out of your home? In addition to all the little details that come with owning a home-based business, one thing that many of us forget is to call our insurance agent for additional coverage for that home office.

It wasn't until my husband and I bought a couple of expensive new computers for our home office that we thought to call our insurance agent for added coverage. From him we learned that most standard homeowners insurance policies will only cover business-related equipment up to $2,500 worth of theft or damage. For most of us, this barely pays for the cost of replacing a single computer plus software and a cheap printer, let alone the furniture and all the rest of our supplies, tools, and electronics.

Even more alarming, it's not just office equipment and office supplies that are at risk of loss. A standard homeowners policy does not cover any business-related activities which can include:

-- loss of records

-- cyber crimes

-- damage while your car is being used for business

-- inventory damaged while in storage

-- stolen or damaged tools and equipment

-- product liability

-- any form of liability related to your business such as false advertising, faulty merchandise or injuries sustained to a customer, delivery person, or employee while doing business on your property.

To limit business loss and liability, adding some home business insurance onto an existing home insurance policy makes financial sense. And, for small business owners who don't need an expensive, comprehensive business insurance plan we can pick and choose areas of coverage that works for our needs. Some of the business policies that our company "piggybacked" onto our homeowner's plan included the following:

-- Business Property Insurance: The basic home office policy boosts your coverage on home office equipment and supplies. Instead of being limited to $2,500 worth of coverage, a home office can be insured for the actual cost of replacing all the contents.

-- Business Liability Insurance: This type of policy protects a business from financial losses due to business-related injury or damage.

-- Business use of car

-- Workman's Compensation Insurance

-- Business crime insurance

-- Contractors Tool and Equipment Coverage

This is just a partial list of the different types of policies available for work-at-home business and home offices. Your insurance agent may have even other suggestions as to how best to insure your business.

As small business owners, we discovered that adding business coverage to our existing home policy was the best way to protect ourselves -- and our small company -- from risk. And for those of us watching the bottom line, business insurance just isn't that expensive when offset against our peace of mind.

More from this contributor:

Can I start a business in my garage?

5 small business training classes and workshops.

The pros and cons of leveraging your home for business cash.