Home is where the heart is. That’s especially true if you run your own small business from home. Even if your small business is your passion project, running it from home can be a lot to handle. You might have special equipment, materials, and inventory scattered throughout your home. You might also have customers and other visitors stopping by on a regular basis. Running a home-based business comes with unique risks that demand good protection. That’s why it’s important that you consider investing in a home-based business insurance policy.

What is home-based business insurance?

Home-based business insurance is a specialized policy designed to help protect your business and your home from risks that aren’t covered in a standard home insurance policy. Having home-based business insurance will help cover your equipment and inventory in the event of an accident. It will also help ensure that your home insurance policy isn’t rendered void if your home is hit by unexpected damages.

How does home-based business insurance differ from my standard home insurance?

The truth is, your home insurance policy is likely missing key coverages you need to protect your business and its assets. Your standard home insurance policy won’t cover common risks and scenarios business owners like you may face, including but not limited to the following:

• If a visitor slips and falls on your property, including both inside and outside of your home.
• If you damage a customer’s property, such as their car.
• If your business inventory gets damaged or stolen.
• If your expensive business equipment gets damaged or stolen.
• If your business equipment causes an electrical fire or similar disaster.
• If your business needs to temporarily close after a sudden disaster.
• If a customer files a lawsuit against you and your business.
• If a product you make or sell causes bodily injury or property damage.

What does a home-based business insurance policy cover?

A home-based business insurance policy can help protect you from a wide range of small business risks. Here are four of the most common coverages included in a home-based business insurance policy, and what they may protect you from:

Commercial Property

Whether you’re selling trendy clothes, running a hair salon, or operating any other type of business from your home, you’ll likely have inventory to store onsite. If a sudden fire damages a chunk of your inventory, or cat burglars sneak away with your products, your business may not be covered by your home insurance policy.

Commercial property insurance may help cover replacement costs needed for your inventory, as well as repair costs needed for your property It may also help cover any electrical, mechanical, or other specialized equipment if it gets damaged or breaks down accidentally. This type of coverage will not only protect your assets inside your home, but outside as well. This can include things such as outdoor signs, fencing, and landscaping. With commercial property insurance, you can make sure that your home-based business is properly protected, inside and out.

Business Interruption

With the unpredictability of the weather, you never know if your home will become victim to a sudden tornado, wind storm, or other type of natural disaster. If your home suffers from a sudden disaster, business interruption insurance can help you recover lost business income and pay for ongoing business expenses while your home is being repaired.

If your home gets damaged by a sudden disaster, it may take time to restore it to a functional state. If extensive repairs require you to temporarily close your home-based business, you’ll lose out on the crucial income you need to pay bills, maintain inventory, and cover other expenses. Business interruption insurance will help you cover your ongoing business expenses, including payroll for your employees, and other expenses, such as alarm monitoring and property taxes.

Commercial General Liability

If you’re selling products or providing services, you’ll likely have customers or visitors coming to your house for business purposes. One bad accident can be pricey for you and your business. A costly lawsuit could stem from a slip-and-fall injury at your home or damage to a visitor’s property, such as their car. If accidents like these occur at your home, your home insurance policy may not cover you.

Commercial general liability coverage, or CGL insurance, is designed to cover damages if you’re found legally liable for bodily injury or property damage to a third party. CGL insurance can also help cover your legal costs and any damages you’re required to pay to the injured customer. CGL insurance is also usually required if you want to participate in tradeshows, farmers markets, and similar events. This means your business isn’t stuck at home; you can take it out on the road too!

Professional Liability

If you consult, design, or provide any type of service to clients from your home, you know that mistakes sometimes happen… nobody’s perfect! Whether you accidentally miss a deadline or forget a critical requirement, these types of errors could expose your small business to costly lawsuits from your clients. If a client suffers a loss because of errors in your work, they could file a suit against your small business.

Professional liability insurance is designed to protect professionals who provide paid services from these types of lawsuits. Even if you run your professional services business from home, this coverage ensures that you have the protection you need to confidently serve your clients.

Keep your home a happy place!

While home is a safe haven for most, home-based businesses must be extra cautious about additional risks. But having comprehensive business insurance that properly protects your home-based business can help you keep your home a happy place. To learn more about how a tailored policy can help protect you, your employees, and your bottom line, visit our Home-Based Business Insurance page.

 

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.