We often get questions from home-based business owners about what a home insurance policy doesn’t cover. Most homeowner’s insurance policies don’t automatically cover business-related damages or losses that occur in a home office. If you’re a business owner, you’ll need to get small business property and general liability insurance to protect yourself against any business-related claims.

Examples of what a home insurance policy doesn’t cover:

Your stock of products on your premises.

Whether you’re running a hair salon out of your home or another operation, you’ll likely have inventory to store onsite. In the event of a flood or theft, damage or loss to your stock or property may not be covered with your home insurance policy. Business property insurance will reimburse you for the cost of damage to your stock.

Your expensive equipment.

Many businesses require equipment to operate on a day-to-day basis. Most home insurance policies don’t provide coverage if electrical, electronic, computer, mechanical and refrigeration equipment break down accidentally or are damaged in some other way such as while being moved. In such cases, equipment breakdown and business property insurance could provide protection for your physical assets, including property in transit. Business interruption insurance can also cover your loss of income if you are unable to earn income because of the damage to your property or if you’re sued by a customer or supplier.

The liability on your home insurance policy will cover a guest injured on your property, but it may not if the person injured is a customer or supplier who’s on your premises for business-related reasons. You’ll need liability insurance specific to businesses in the event one of your customers or suppliers sue you because they believe you damaged their property or caused bodily injury to them.

Understanding your home insurance policy

Now you have a better understanding of what a home insurance policy doesn’t cover and how general liability insurance can protect your business assets inside your house.