Everything You Need to Know About Home-Based Business Insurance

Running a business from home offers convenience, but did you know that your regular home insurance might not cover business-related risks? That’s where a home-based business insurance policy comes in. If you’re self-employed or using your home as your central place of business, this is a must-have for protection.

What is a Home-Based Business Insurance Policy?

A home-based business policy covers any income-generating activity from your home that is not already covered by an employer’s commercial liability policy. Whether you’re offering services or selling products, it’s essential to have coverage tailored to your home-based operations. If you work from home on behalf of an employer, you will also want to speak to a broker to ensure permission for business use is declared on your policy.

What Does a Home-Based Business Insurance Policy Cover?

• Liability Protection: You’re covered if a client gets injured on your property.
• Business Property: Protects equipment or stock you keep at home.
• Business Interruption: Covers lost income if your home becomes temporarily unusable.

Key Differences Between Home-Based and Commercial Business Insurance

Unlike a commercial insurance policy, claims under a home-based business policy can affect your home insurance rates and eligibility for claims-free discounts. Coverage is also more limited and depends on the type of business you’re running. Home-based business coverage is only available on your primary residence, whereas a commercial business policy can be put in place for a business operated out of a seasonal or secondary home.

Why Liability Coverage Is Essential for Home-Based Businesses

If clients visit your home or you make deliveries, you’ll want robust liability coverage. While home insurance may offer $2 million in coverage, businesses often need more. For higher-risk businesses, $5 million is recommended.

Factors That Affect the Cost of Home-Based Business Insurance

Several factors impact the cost, including:

• The type of business you run
• The number of workers employed
• Limits required for business property and/or stock on premises
• Your business income
• The number of clients visiting your home
• Overall business exposure, such as online sales or deliveries

Legal and Zoning Considerations

Before diving into your home-based business, check local zoning laws to ensure you’re legally allowed to operate from your residence.

Home-based business insurance offers essential protection, but it has its limitations. Sometimes, a commercial policy might be a better fit, especially if your business has higher risks. We’re here to help you find the right coverage – whether that’s a home-based business policy or something more robust.

Use the form below to contact one of our knowledgeable brokers and learn more about our home-based business coverage.