Homeowners Insurance and Your Home-Based Business

If you’ve started a side hustle to supplement your income or are diving in as an entrepreneur, you probably have enough on your plate and haven’t even thought about insurance. Whether you’re selling a product or service, and no matter how small your business is, protecting it should be a priority. While homeowner’s insurance protects your home, it may not insure parts of your business. As a result, you may need additional business insurance.

Without the right coverage, you could find yourself hit with a lawsuit that drains you financially – including your personal assets. From freelance graphic designing to food delivery services, crafting, online selling, and everything in-between, we understand you have unique needs for insurance and we’re here to help guide you through the process.

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 based business.

What may and may not be covered

While your home insurance policy covers your personal belongings and personal liability, it probably will not cover your business activities or your business inventory. You’ll need to have a separate policy, or in some cases a home business endorsement added, to be sure you’re covered financially for your business property and business liability. For example, if you sell custom jewelry online and your supplies and inventory are destroyed by a home fire, you may find that your standard home policy may cover just a small amount of the loss, if it covers it at all.

Similar to home insurance, your auto insurance policy probably does not cover you if you use your vehicle for business purposes. From minor rear-end accidents to pedestrian incidents; drivers are at risk every time they make a delivery. To make sure you are protected, talk with your agent to see if they can help find an add-on coverage option or a separate commercial policy to cover you. If you do get into an accident and only have personal auto insurance, you could end up having no coverage for the accident and any resulting lawsuit.

We hope these tips help keep you, your family, and your business safe. As with any insurance policy, home business coverage will depend on what your home business is, so it’s best to speak with an agent to understand your options. To learn how we can tailor a business policy to be sure you’re covered, please contact us for a no-obligation quote.