The Price of Doing Home Business
Dear Paula Cee:
I recently started my own business from home – designing corporate brochures and other marketing materials for small businesses. My pride and joy is a brand-new laptop computer – complete with all the bells and whistles – that I often take with me to demonstrate layouts to clients. Do I need special insurance for my computer? It is, after all, my livelihood, and I don’t know what I’d do if anything happened to it.
That could certainly take a byte out of your business, all right. Unfortunately, many home-office workers assume that everything in their house or apartment is automatically covered under their homeowner or tenant policy. Not so. Homeowner policies are intended to insure private dwellings – not businesses – so they will not provide the coverage you need for your home office. For your laptop and other office equipment, you need a policy that has been specially designed with additional coverage for your business. While a typical homeowner policy does provide limited coverage for these items, there are two reasons why you need additional insurance. First, business equipment is covered only while in your home, not while it travels with you. (The exception to this restriction would be if the equipment were used purely for pleasure – clearly not the case here). You need special coverage to ensure your computer is protected both at home and away. Second, there is a limit under your homeowner policy on how much you can claim in the event of a loss for business property – usually in the range of a few thousand dollars. (There may also be a separate limit that applies specifically to software.) Let’s say you went away for the weekend and your home was burglarized. The thieves stole not only your precious laptop, but also your fax machine and printer. That claim amount would not go far in replacing your laptop, let alone the other stolen property. As every home-based business is different, there is no single “standard home-office coverage.” Explain your operation in detail to your insurance provider, and make it your business to get the right coverage.
Dear Paula Cee:
I was on my way to my weekly golf game when my car was rear-ended. Luckily, it was just a minor accident and no one was injured. I was so upset at the time, however, that I couldn’t think straight and didn’t know what to do. The other driver said it wasn’t necessary to call the police because there wasn’t much damage to either car. We exchanged some information, but now I’m worried that I should have reported it to the police. What should I do?
– All Shook Up >
Dear Shook Up:
Well, that’s one way to play scratch golf! As long as no one was hurt, the first step when you’re involved in a fender-bender is to trade information with the other driver. You need his or her name, driver’s licence number, licence plate number, insurance policy number and name of insurance company. Information on the make and model of the other car is not essential, but might be helpful. If you live in a city that has collision-reporting centres, you must go to one of them to report your accident; otherwise, notify the police. This is a requirement if there is $1,000 – or more – worth of damage to either car. If your accident took place on private property, such as the parking lot of a shopping plaza, police will not respond; nonetheless, it is still important to report the accident to them because of possible insurance implications. Let’s say, for example, your car was parked at the shopping plaza, and you were the victim of a hit-and-run accident. Many insurance companies have a rule that they will pay for that damage under your collision coverage. While you will have to pay the deductible (the portion of the claim that you have agreed to pay), the accident will not affect your insurance record or your premiums. Of course, if you don’t carry collision coverage, you’re out of luck. Once you have notified the police, you must report the accident to your insurance company. Your policy states that if you cause damage to someone else’s car, or if someone else damages your car, you must promptly give notice to the insurer in writing. Finally, keep your cool. Fender-benders can be upsetting no matter how minor, but they are, after all, par for the course.
Remember, policies vary. When in doubt, consult your insurance representative. Source: Insurance Bureau of Canada.