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.

2. Floods.
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 damage.
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.

6. Safes.
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 lightening.

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.