If you own a home-based business, making sure you have the right business coverage may not be at the forefront of your task list. However, it is a business necessity that should not go overlooked.  Home-based businesses run risks just like any other type of business. Therefore, owners need to ensure they are covered or they could be held personally liable if anything were to happen to their business records, employees, customers, equipment, etc.  Plus, these home-based business risks may not be covered in an existing homeowners or renters insurance policy so having coverage to insure the business specifically is essential.

For home-based businesses, here are four different types of policies to look into:

  1. General Liability: This is the simplest, most basic coverage you can have for an in-home business. It will cover you if the business is sued, if a client/customer/employee is injured on the business’s property or if you happen to sell a defective product. Basically, if you don’t have business equipment or any product inventory to protect in your home, this is the type of coverage that’s best for you.
  2. Homeowners/Renters Add-On: This is commonly called a “rider” to your homeowners or renters policy. It is an inexpensive option that you can add to your current homeowners or renters insurance policy that offers coverage that is extended to your business.  These policies do have limitations, but it will cover some equipment, if your business is sued, if someone is injured on the business’s property, etc.  Therefore, if you have minimal equipment for the business and if you don’t have individuals coming to the property for business purposes, this might be a good option for you.
  3. In-Home Business: This policy is more comprehensive in its coverage for home-based businesses that employ up to three full-time employees. It will provide reimbursement for misplaced business records, interrupted business costs, stolen business funds, expenses with using a temporary location, costs due to employee/customer injury, damaged equipment, etc. So, if you are a small home-based business, but you have a lot of information and valuables to cover, this could be good for you.
  4. Business Owner’s: This policy offers the most all-inclusive coverage for a home-based business.  This coverage encompasses damage to property and equipment, loss of monetary income, malpractice claims, inventory loss or damage, natural disaster destruction, liability for workplace injuries, etc. You can add endorsements to this type of coverage that cater to the needs of your business as well.  Therefore, if you need the most coverage for your home-based business because it is a large company with lots of equipment, inventory, personnel, and other moving parts, this may be right for you.

If you run and operate a home-based business, but aren’t sure which coverage is right for you, contact us and we can put you in the right direction.