Insure Your Home Office Against Disaster
Disasters in the home office usually don't involve natural phenomenon. We
often think of office disasters as misplaced files or lost contracts. But
what happens when the disaster really is a disaster? Are you covered?
One bolt of lightening can wipe out an entire office worth of equipment, and
then some. Are you insured for that? What you want is to make sure that your
homeowner's policy covers your home office.
Every insurance company will have different rules about coverage and about
what constitutes a home office. Some will cover your home office under your
homeowner's policy if you don't have clients come to the home. Others will
require a rider or separate policy.
When disaster strikes, whether it is a bolt of lightening from the sky or a
busted pipe that floods everything, you need to know what is covered and how
to get up and running again in the shortest period of time. Here are some
helpful hints to getting your office humming again:
1. Know your policy.
Go over it in detail with your agent before anything
happens. You need to make sure you are covered for Acts of Nature, such as
lightening. You will also want to take out the coverage for water damage not
caused by flood especially if your home office is located on a lower floor or
basement of your home.
If you are in an area prone to natural flooding (as a result of rain, not
burst pipes), look into getting a flood policy through FEMA, the Federal
Emergency Management Agency.
3. Keep Records
Keep an office inventory with original prices and warranty information
handy. It is best to place information like this in a fireproof safe. This is
the quickest way to get your check.
4. The first thing your insurance company will want is an assessment of the
You need to have quick access to repair costs versus buying new. The
web is a great way to find this information. There are plenty of sites with
price information. Be prepared to plead your case. In some instances, it may
make more sense to replace than repair. It is up to you to know the prices
and discuss them with your agent.
5. Insure yourself accordingly.
Some clients may require insurance policies
in excess of $1 million. The amount you need to insure your home office
depends on the type of business it is and your clientele. Talk to other
professionals in a similar field to get an idea of proper coverage.
Always store sensitive and archive material in a fireproof safe. You may
even want to keep copies at an alternate location just in case.
7. Keep good records on everything.
You don't want to have to hunt through
stacks of paper to find phone numbers, policies or an inventory.
8. Carefully consider the location of your home office.
It isn't necessarily
a good idea to put a home office in a basement if your basement tends to leak
or be damp. This is not the best idea for electronic equipment. You may even
want to move your computer away from windows to avoid being struck by
9. Have a disaster plan.
Know what you are going to do if the roof literally
caves in on your home office. A plan will help you get things back to normal
as quickly as possible.
Source: Based on information from Home Office Computing.