He has a small (but nice) music studio in our home, and his idea is that people could come in and record themselves singing or playing the piano or whatever. They wouldn't be professional musicians, just talented amateurs who need or want a professional-quality recording of themselves, for college applications or as a gift for grandma.

Our current insurer doesn't offer business insurance, so we'd have to change carriers. I called an agent for a quote, and was told that it could cost as much as $1500 a year, and that we'd need to incorporate to protect our personal assets.

Now, this is NOT a business that is going to generate much income right off the bat. I'm really wondering if this makes sense financially. I don't want to crush hubby's dream, but we can't do this without adequate insurance to protect our assets.

Does anyone have any experience with this type of insurance, that they'd like to share?

- Does your husband know what kind of business he will create (sole proprietorship, S corporation, etc.)? That may have an impact on the choice of insurance he must have and/or can get.

- If it is a sole proprietorship, ask your current insurer if perhaps an umbrella liability policy would be suitable. Umbrellas extend your existing home and car coverage to a level you specify ($1 million, etc.) and don't cost all that much (because they're not claimed against frequently).

You also could call some other insurance agents asking them about home coverage and mentioning the home-based business and see what they say, just for the sake of comparison.

I think my husband's business will be a sole proprietorship, although we were advised to talk to a lawyer about incorporating, to protect our personal assets. I'll ask the insurance agent to quote rates for both types of businesses.

We do have an umbrella policy currently, with the same insurance company as our homeowners and our auto coverage. Unfortunately, this is the company that says they'll drop us if we have a home based business, so I'm going to be shopping for new insurance for everything if we do decide to go with the home business.

Such a pain in the neck.

If you want to have some more fun, call your mortgage company and tell them that you are going to start a business in your home. (If you take out a business insurance policy, the mortgage company will, of course, find out that you did that, because they require insurance to be in force as a condition of your mortgage.) There are probably provisions in your mortgage that prohibit turning your home into a place of business. Your city officials may have something to say about it as well, even though you won't have any sign or other exterior evidence of "a business."

Before you call anyone else, read your existing homeowner's policy over VERY carefully. You may well find that there are loopholes that could allow occasional business use of your home. It's not like your husband is going to put up a big sign and turn your house into a full-scale business. (Zoning wouldn't even allow that, of course, unless you already live in a commercially-zoned area.)

Many of the things people do are probably in some technical violation of a mortgage, insurance policy, or local zoning rule. I'm not saying this is okay, or that people just should ignore these types of things, but there is a reasonable threshold of common sense you have to consider. My position at this point would be that what your husband proposes to do is on a very small scale. If it really takes off and he has customers showing up every day, he'll probably want to take this out of the home into a proper commercial location anyhow.

Re: the zoning, it's an "appointment only" business and the signs state that. Several of our neighbors have similar small businesses and signage, which is enough confirmation of the legality for me.

Insurance is one area where I don't want to bend the rules, even slightly. We'll have people parking on our property, using walkways, going up steps inside the house. My nightmare is that we'll get sued for a million dollars and lose everything because someone got run over and killed in our parking area.

After lots of running around, I managed to get a reasonable quote from an agent, and we're probably about a week away from getting new homeowners/umbrella/business liability policies.

In terms of inc. you may just want to set up a LLC to protect your assets. Full Inc may not be warranted but talk to your tax advisor or an accountant. If you husband wants to borrow money for the business i dont believe a bank will lend to the corporation but your husband only since this is a new business.

Your liability policy should be a minimum of $500k depending on what your husband intends to do in the home. An umbrella is a good idea as it will provide another $1 million.

... but they grind exceeding small.

So I've heard.

Don't know whether they handle DVDs (for a different business than that to which the original poster referred).

Oh ... right ... the lady has to take on the other business to pay the insurance. She should have some surplus ... I think that he spoke of 7 figures (possibly including some "000"'s in front of the "1"?).

ole joyful

We have our office in our home (we farm & have multiple employees) and live on an acreage near a small town. We had a guy apply for a job, filled out the application, hubby showed him our operation & in doing so asked interview type questions. Afterwards not one of his references was real. Months later as we read the paper, in the court proceedings was this guys name, John Doe, AKA......., AKA...... charged with theft by deception. He was scoping out our place. At that time we had small children & that was a whole other area of concern.

We live along a highway and have various people stop by due to car problems, out of gas, weather-related concerns, or to sell things, I never go to the door without a cellphone or business band radio in hand. Sorry, but I'm really leary about who I let in my house anymore. We had a new pickup stolen in the middle of the night from our shed less than 50' from our bedroom window. (this happened years later--totally separate from the job applicant incident). Once you've been "spied upon" or taken advantage of your level of trust adjusts quickly.

Obviously you'll be running a legitimate business, but you'll still have random people coming to check out your services. It just takes one bad apple to start souring things quickly.

No appointment? you wait at the door (which I close and which locks) while I get my appointment book. You stand on the doorstep, I stand on the threshold, while we set a date and time for your APPOINTMENT. My 100 lb. dog sits behind me through all of this (after he's sounded the alarm). You will understand quickly that you have violated my privacy and that it is not to happen again. I'm polite, but brusquely efficient. I can count on one hand the number of "drop ins" I've had in nearly 17 yrs..

All the above is what happens IF I deign to answer the door, at all. ;)

"By appointment only" means exactly that.