Home Based Business

Running a business out of your home helps keep overhead lower for entrepreneurs but there are some insurance considerations to making sure you’re protected in the case of a loss or accident.

Your homeowners insurance may not include protection for your business’s property including:

  • Technology
  • Files
  • Professional equipment
  • Supplies/Inventory
  • Client assets

Self-employed professionals should consider home based business insurance to protect their business assets.

What is allowed in your policy?

You should also be careful if you’re using your home for activities that your home insurer isn’t aware of. This may nullify your homeowner’s personal liability coverage. One example of this could be running a business out of your home. This puts both your home and business at risk.

Business insurance is essential for many reasons. It can help cover the costs of legal claims made against a business. Without it, a company must pay the costs of a claim or lawsuit out-of-pocket.

Do I Need Home Business Insurance?

For all the home-based business owners out there, you need to ask yourselves a few essential questions including:

  • Do customers or clients come to my home?
  • Do I keep inventory or supplies in my home or at off-site job locations?
  • Would I lose income if I had to close my business because of damage to my home?
  • Do I have employees working in or outside of my home?
  • Do I maintain client or employee records on my computer?

If you answered “yes” to any of these questions, you may want to review your type of coverage and coverage limits. In this case, home liability insurance might not provide enough protection for your home business.

Without the right coverage, your business could be responsible to pay out of pocket for:

  • Property damage
  • Lawsuits
  • Employee injuries
  • Issues related to data loss

Flexible Coverage for Home Based Businesses – Small and Large

Home based businesses can range from small consulting practices to larger retail operations. Below you will find coverages offered by one of our providers, The Hartford.

General Liability Insurance – helps protect you if you’re sued for a variety of reasons. These can include negligence, personal injury or a faulty product. If you don’t have inventory or equipment in your home or at off-site locations you may want a basic general liability policy.

A Business Owner’s Policy – helps cover structures on your property where your home-based business operates. It can also help cover damage to inventory or loss of income if your home suffers damages. Keep in mind that a standard business owner’s policy combines property and liability coverage for your business.

Business Owner’s Policy with Endorsements – allows you to tailor your business owner’s policy with endorsements. For instance you can add data breach coverage. This helps protect your business’s stored personal information about customers or employees. You can also add optional Business Income for Off-Premises Utility Services (OPUS) coverage. This helps cover a loss of business income from an interruption in utility services.

Examples of Businesses That May Need Home Based Business Insurance

Web Design Firms. If you’re like a lot of web designers, you likely have a home office. This office likely houses business equipment such as computers and design software. You also likely have client files, office furniture, and work stations even though most of your business takes place online. That said, say your home gets damaged from flooding, a power surge, or other activities. Your home-based business insurance may help cover their claim.

Interior Decorator. For interior decorators who run their services out of their home, you’ll likely need home based business insurance. This is due to clients visiting their home and business premises daily. In the event of an accident where the business owner is held responsible, home business insurance may help. It can help protect both the owner and their business assets.

Photographers. If you’re a photographer, you may conduct photo shoots off-site, but have a studio in your home. These studios house lighting equipment, props and multiple cameras. Clients may even visit them from time to time. In the event of an accident where you’re legally responsible, home business insurance may help