Working from Home: How Home-Based Businesses Work With Home Insurance

Home insurance and business insurance are two very different things. So what happens when you have a business that is run out of your home? Running a home-based business requires some special considerations on that should be discussed with your insurance professional to make certain everything is covered as it should be.

Covering Business Property

Your home insurance is not designed to provide enough coverage for items that are owned by a business, whether it’s your business or a company you work for. This becomes especially important if the business you are running keeps valuable stock on the premises of your home, or there is expensive equipment involved in running the business. While some property coverage may be available through the home insurance policy, there is usually a limit that won’t come close to covering everything your business needs.

Most homeowner’s insurance policies also do not cover business property off of the home premises. That means your laptop isn’t covered if you take it with you outside the home. You will need a business property policy in order to provide full coverage for all of the important and valuable property owned by your business.

This type of policy can be tailored to the needs of your particular type of home-based business to make sure you have full coverage for expensive equipment and stock.

Business Liability

You have liability coverage on your home insurance policy to protect you from any sort of suit brought against you for damages or injuries as a result of your negligence. That liability coverage may not extend to the large number of liability risks that can be a part of running a business.

A general liability policy is a good idea for any home-based business that involves having customers on the premises. If a client or someone else who is on your property for the purpose of conducting business with you is injured, your homeowner’s insurance will not cover it. You will need to have a general liability policy covering your business. Without this policy you could lose your entire business and suffer personally as well should a lawsuit be brought against you.

Other Coverage You May Need

A home-based business can vary greatly just as do businesses run from office and retails space. There are a lot of different types of businesses that can be run from a home office. Each comes with its own particular risks that should be considered when it comes to insurance coverage.

Some types of professionals need to consider professional liability insurance or errors & omissions insurance. For example, if you are a real estate agent working out of your home, you could find yourself facing a lawsuit if you make a mistake on a legal form. Errors & omissions insurance will protect you against the fallout from such a mistake. Several different types of professionals need this sort of coverage.

There are also professional liability insurance policies to cover other types of errors you might make in the course of your business. If you run a hairdressing chair out of your home and make a mistake the results in an unhappy client, you could face a lawsuit. The right insurance will protect you from such a suit.

A business that produces a product of some kind will want to carry product liability insurance. This is a type of coverage that protects you from any kind of liability stemming from the function or use of your product.

Informing Your Insurance Company

It is important that you inform your home insurance company when you start running a home business out of the house that they are insuring. Failure to do so can result in denial of your claims in the future or even non-renewal of the policy.

Your home insurance company needs to know what type of business you are running. They might also be able to help you to obtain the coverage you need to be fully protected when doing business from your home. You may be able to get business coverage from the same company, or they can help you to find a company to help you.

Whatever type of business you are running from your home, you can’t count on home insurance to cover all of the possible risks of that business. Let an insurance professional help you put together a small business policy that protects all of your investment in your business so that you don’t lose the time and money you have put into it to an accident.

Also see: 5 things Homeowner's Insurance Won't Cover