Thursday, December 24th, 2020

Insurance for Your Home-Based Business






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If you’re an entrepreneur with a home-based business, you may have considered getting business insurance. Well, hesitate no longer. The question is not whether or not to get insurance, but what type of insurance to get.

You definitely need insurance for your home-based business.

Just because you can run your business in your pajamas doesn’t mean it’s not a real business. So, it needs to be insured just like any brick and mortar establishment.

Your homeowner’s policy carries little or no coverage for a business and some insurance companies may even invalidate your policy if you file a business-related claim.

As a result you’ll have no coverage for:

Buildings used for business purposes
Loss or damage to business records or data
Loss of income that results from a business shutdown caused by physical loss to business property.


Why Do You Need Insurance for Your Home-Based Business?

Consider the following:

1) You run a consulting business from home, as an IT professional. If your home is robbed and all your expensive computer equipment is stolen, you may find that it’s not fully covered under your homeowners’ insurance because it is considered business property.

2) A business delivery person is leaving your home-based architect office and slips on some wet steps and sustains injuries. Your policy might not pay for these injuries because your insurance doesn’t cover business deliveries or any third-party injury claims.

3) If you run a landscaping business out of a building adjacent to your home and it catches fire and burns your equipment, you’re mistaken to think your homeowner’s policy covers such an incident.

4) As an accountant, you advise a client on a financial matter that ends up costing her money. As a result, she files a lawsuit. A homeowner’s policy won’t come close to touching that.

These are only a few reasons to purchase home-based business insurance.

Neither homeowners’ nor renters’ insurance policies cover home-based businesses.


The many types of business insurance include:

Business property insurance which covers any kind of equipment used to operate your business including your computer, printer, fax machine, furniture, etc.

Liability insurance that protects you and your business from being liable for damages caused to another person or property.

Product liability coverage to protect your business from damages to property or a person caused by a product you supplied, manufactured or designed.

Business automobile coverage which will provide coverage if you are in an accident while making pickups or deliveries, visiting clients or performing other business-related tasks. Your personal auto policy does not cover using your vehicle for business.


Here I have covered only a few types of insurance for your home-based business. There are many more for you to consider, depending on your particular business.

It is wise to work with an insurance professional who can furnish the details you need for the particular type of home-based business insurance that’s available for your business.

Based on the many potential business liabilities, you’re probably better off having at least a combination of a few policies, depending on your business needs. And that could be one less thing to keep you awake at night.


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