Home is where the heart is. That’s especially true if you run your own small business from home, but while your small business could be 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. Your neighbors might think you’re having a never-ending house party! Running a home-based business comes with unique risks that demand good protection. You might think your home insurance policy will help cover any business-related damages or losses at your home, but the truth is, your home insurance policy will likely be missing key coverages you need to protect your business and its assets. For example, your policy probably won’t cover any business equipment that gets damaged at your home, or inventory that gets stolen. It also won’t cover the legal costs associated with customer slip-and-fall accidents that could happen at your home. To keep your business, your home, and your heart at ease, consider home-based business insurance — it can help you recover from business-related losses.
How does home-based business insurance help?
A home-based business insurance policy can help protect you from a wide range of small business risks. These include damaged inventory, broken equipment, liability claims, and customer lawsuits. Having the right insurance coverages in place for your home-based business can help you keep your day job and home life as stress-free as possible.
Stolen inventory, damaged equipment, and customer slip-and-fall accidents on your property are just a few examples of the common risks that aren’t covered by standard home insurance policies.
What a home-based business insurance policy can help cover:
Damaged or stolen inventory
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.
Damaged business equipment
You might need specialized equipment to run your business, but most home insurance policies don’t provide coverage if electrical, mechanical, or other specialized equipment gets damaged or breaks down accidentally. Commercial property insurance may help cover costs from damage caused by external sources, such as fire. In some instances, your equipment may accidentally break down due to internal sources or damages. In these cases, equipment breakdown insurance may help cover the cost of repairs to your equipment. If excessive equipment damage forces you to close your business temporarily, business interruption insurance is designed to help you recover lost business income and cover ongoing business expenses until you can open your business again.
Injured customers or visitors
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 (CGL) insurance is designed to protect you and your business from a loss if you’re found legally liable for bodily injuries or property damage to a third party. Liability is a top risk for home-based businesses, so having CGL insurance built into your home-based business insurance policy is an essential step. CGL insurance is also important to have if you plan on showcasing your business at tradeshows, farmers’ markets, or similar events. When a venue hosts a tradeshow, the organizers will usually ask you to provide proof of insurance before letting you set up a booth. This is to ensure that if you accidentally damage the venue, your insurance will cover the repair costs. With your CGL insurance in place, you won’t need to worry about footing the bill.
Mistakes in your work
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. Having professional liability coverage built into your home-based business insurance policy may help protect your business from costs associated with these types of lawsuits.
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.
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.