Most home based small business owners depend on Homeowners Insurance to protect their business. This is a mistake by home business newbies as most homeowners policies do not include liability coverage for business-related activity.
But before insuring your home based small business, you need to asses your situation first. Check your homeowners policy to find out if there are any restrictions on business property and activity in the home which could result in breach of policy.
You would also need to consider the most appropriate coverage for your home based small business. Take a look at your office equipment and inventory. How much would it cost to replace them? What would be the opportunity cost if you had to stop working for some reason?
Then consider these types of insurance:
-Public liability cover (for persons visiting your business at home )
-Professional liability/malpractice insurance
-Workers compensation
-Fire, storm and theft cover for the loss of any stock and equipment
-Personal accident or illness
-Opportunity cost from interruption to your business
-Freight policy Commercial Auto Policy (if you transport your own goods)
It is important that you do not take it for granted that your Home Office Policy (HOP) or Business Owner’s Policy (BOP) covers everything you think it does. Always check the fine print and specifically request for coverage you wish to include in your policy.
Always remember that insurance is just a safety net. Claiming from your policy would result in higher premiums. It would be wise to try to prevent loss or damage to your home based small business. For example, get a surge protector or voltage regulator for your office electrical equipment. This would come in real handy during an electrical storm or a short circuit. Consider getting an alternative power supply like a generator so that work can go on even during a power failure.
Practice preventive maintenance to ensure that your equipment does not bail out on you when you need them most. Have an electrician confirm that the main fuse box is geared to take the extra load from your office equipment. Also ensure that the power points are not over loaded.The security level at your home would need to be heightened. Consider purchasing a safe to store important documents and money. It would not be a bad idea to invest in a home safety and security system with coded locks, smoke alarms and motion sensitive lights.
It is also just plain good sense to have a first aide kit and a fire extinguisher in working condition 
available in case of emergencies.
Some of the suggestions above may seem like a huge investment but most of them are one time deals. While you ponder over them, just remember the old saying - ‘It’s better to be safe than sorry.’
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Brad Keet is an entrepreneur and Internet junky. Brad invites you to journey with him as he dishes out home business startup tips and other home based small business information. For more of Brad’s take on things, log on to www.fromhomeeveryday.com
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