Live/work insurance

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You'll need to insure your equipment, your products and the materials used to make them, any vehicles you use for your business and, of course, liability insurance is a pretty good idea. You might also want to consider business interruption coverage to protect you if you're temporarily unable to work.

Basically, you have three options. The first is simply to extend your existing homeowners policy, as most policies will only insure business equipment up to a value of $2,500. These endorsements usually cost very little and might be the best option if you don't have much equipment and don't have clients visiting your unit.

The second is an in-home business policy, which provides more comprehensive cover than you'd get from an endorsement for your homeowners policy. You'll have more coverage for business equipment and it will also cover you for personal liability, loss of income and costs incurred if you need to operate out of a temporary location. Essentially, it's an amalgamated home and business policy in a single package.

The third option is to take out a business owners' policy (BPO), something that's specifically aimed at small or medium-sized companies. This will include everything you'd be likely to find in a commercial policy, but may be a little too comprehensive for many live/workers needs - you'll really only need this if you're manufacturing products and liability is a real issue. As well as covering you in the event of a client having an accident in your unit, there's also off-premises liability - for when you're on someone else's property - and it can also include libel insurance. None of the three options include health insurance.

Depending on your needs, it may well be worth securing the services of a good broker to get you the best deal.