Running a business out of your home may be convenient, but it can also come with significant risk that a homeowners insurance policy won’t typically cover. Instead, people who run businesses out of their homes should consider additional insurance coverage. Without adequate insurance, a home-based business owner must pay for costly incidents out of pocket.
While homeowners insurance is designed to protect your home and personal belongings, it may not be sufficient for your business activities. The following are some fundamental limitations of a standard homeowners policy:
- Limited coverage for business assets—Homeowners insurance typically covers personal belongings, but it may have limitations regarding business-related assets such as equipment, inventory or tools.
- Liability gaps—If a client or customer visits your home for business and gets injured, your homeowners policy might not cover the liability. Business-related liability often requires a specialized policy.
- Business interruption— A standard homeowners policy may not cover losses related to business interruption. If your home-based business is temporarily shut down due to a covered peril (e.g., fire or natural disaster), you might not receive compensation for lost income.
- Professional liability—If your home-based business involves providing professional services or advice, a homeowners policy may not cover errors, omissions or negligence claims. Professional liability coverage is crucial in such cases.
Do I Need Separate Insurance for a Home-based Business?
Types of at-home businesses can vary greatly, which means their insurance needs will also be different. Home-based business owners can consider the following insurance options:
- A homeowners policy endorsement is potentially the easiest and most cost-effective solution. It supplements your existing homeowners policy and is potentially suitable for businesses that don’t involve manufacturing goods and are small or solo operations.
- An in-home business policy puts home and business insurance together in one plan. This policy is ideal for businesses that meet with clients, possess equipment and generate output.
- A business owners policy is the most comprehensive option. This option provides coverage for various types of liability and property coverage. A home-based business may need to fulfill specific prerequisites to be eligible for this type of policy.
Speak with your insurance agent for help assessing your business insurance needs.
Insurance for Home-based Businesses in Tewksbury, MA
Contact Schaffner Insurance Agency today to discuss your situation with our team and determine the best coverage for your home and business. We can ensure you have an all-encompassing insurance policy to operate your business out of your home confidently.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.