Home studio as small business and necessary insurance

[0xeneye]

A poster in another thread said:

as far as small biz, i personally file the stuff on my taxes. all my revenue and expenses. i recommend equipment insurance as well if you are planning on making it a business. the more gear you have, the less likely your homeowner's insurance will cover it...be careful how you approach liability insurance for conducting business in your home...your insurance company will want to charge you some crazy rates...consider safety alarms...

This is news to me,...I make a little off of recording music as a side hobby, and deduct all my music shit on tax day. So, exactly what kind of liability insurance do you recommend, and how can I save some money by showing how secure my studio is? Any good stories/bad stories/suggestions appreciated....