NEW YORK -- If you run a business from home, whether full-time or part-time, you probably need more insurance protection than you carry now.
Around 12 million people are believed to be working from home. A fire, a burst pipe or a tornado might ruin not only their living quarters but their livelihood. A lawsuit, brought by an injured customer or employee, could wipe them out financially. A thief might vanish with their computer or inventory.
Some self-employed people think that special insurance will cost too much. But you might find the coverage you need for as little as $15 to $50 a year -- with the price depending on where you live, the company you insure with and the type of business you run. A more comprehensive policy might cost $75 to $400.
Home-business insurance is an industry in transition. The traditional coverage wasn't designed for today's consultant-telecommuter- business-service-home-based entrepreneur. New types of policies are being developed, targeted at the new workplace's special needs.
So when looking for insurance, it's important to speak with two or three agents. Some agents can offer more inventive policies than others.
Here's the general range of offerings:
* Your current homeowner's or renter's insurance.
You may think that your basic policy covers the contents of your home office, but that's not necessarily so. It typically protects only $1,000 to $2,500 worth of business equipment and $250 for a loss off-premises (for example, if a pickpocket lifts your cellular phone).
The equipment is insured against the risks named in your policy, like fire, theft, windstorm and so on -- but not flood (that comes only under federal flood insurance) and not if your toddler dumps his spinach into your laser printer.
There's no protection against lawsuits, and no income- replacement if your business shuts down because of damage to your home.
Nevertheless, simple homeowner's insurance may be sufficient for a one-person craft or service business. Read your policy to see what's covered.
Strictly speaking, business computers are often excluded. But if you also use it for games, balancing your checkbook and other personal matters, the insurer may accept it as covered personal property, says Sean Mooney of the Insurance Information Institute.
* Traditional riders to your homeowner's or renter's insurance.
You can raise your home-business coverage limits, to protect equipment worth up to $10,000 or $15,000, and $1,000 or $1,500 off-premises. There may also be riders for limited types of liability, such as injury to customers on premises -- but not for broad business risks like false advertising or product liability.
To qualify even for limited liability coverage, your business might have to be "incidental" -- meaning small. For example, some companies write these riders only if you gross less than $5,000 a year.
Cost range for a rider: around $10 to $15 a year -- and perhaps $40 for a package of several protections.
Liability protection for home day care is written separately. Allstate Insurance's day-care rider, for people caring for up to four children, ranges in cost from $60 to $80 annually.
* Separate business owner's policies.
These cover the works: loss of equipment, inventory, computer files, business property, cash up to $5,000 or $10,000, a broad range of business-liability risks, and off-premises losses of equipment worth $15,000 or more.
You get "all risk" protection -- meaning that you're covered for any loss not specifically excluded. If there's spinach in the laser printer, you can put in a claim.
Just as important, if your business shuts down because of damage to your home, you can be reimbursed for up to 12 months of lost business income.
You're also covered for the cost of setting up shop in a new location.
Price range for a typical home-office package with a $250 deductible, from State Farm Fire and Casualty Co: $150 to $250 a year, in a big-state metropolitan area.
In White Plains, N.Y., insurance broker Richard Blank puts a high-end policy at $350 to $400. In rural Iowa, you might pay $75.
* Mini-business owner's coverage (specifically designed for today's home-based businesses).
This new type of coverage, not yet available in all states, should cost less than traditional business coverage.
There are stand-alone policies that anyone can buy -- like RLI Insurance's In-Home Business Insurance Program and the Fireman's Insurance Home Enterprise Program. And riders to homeowner's policies, like those offered by Continental Insurance and newly by Aetna Life & Casualty. Ask an agent about them.
Next time: The growth of mini-business coverage.
Jane Bryant Quinn is a syndicated columnist. Write to her at: Newsweek, 444 Madison Ave., 18th Floor, New York, N.Y., 10022.