In-home Small Business Insurance

Does Homeowner’s Insurance Cover My In-Home Small Business?

Your homeowner’s insurance protects your home and its contents up to the limitations set in your policy. However, if you run a business from home, it’s likely that your homeowner’s policy does not cover your small business.

Think of it as though your business is an entirely separate entity, like the bakery down the street. That means if you lose inventory or equipment in a home disaster or a theft, your homeowner’s policy probably will not help you. It also won’t save you if a delivery person takes a spill and gets injured on your property, and then decides to sue you for medical bills and damages.

Perhaps even worse than that would be if you consult with a client and give advice, and then your client sues you, saying your advice cost him money. Without errors and omissions insurance, you’ll have to deal with the lawsuit out of your own pocket.

Add on coverage to prevent a loss of business

Especially if your business is your primary livelihood, don’t take a chance on not having coverage. The good news is, you have many options for insuring your home business, including the following:

  1. Endorsement on your homeowner’s insurance. Some providers offer an endorsement for as little as $25 to $50 per year. There are limitations on this coverage, however. It probably covers around $2,500 of equipment and offers some coverage for slips and falls on your property. If you need professional liability insurance, you need something more than this level of coverage.

  2. In-home business coverage. This is the next step up from an endorsement. For $250 to $500 per year, this policy may offer added protection for lost computer data and business liability.

  3. Business owner’s policy, or BOP. This policy covers you for loss of data, errors and omissions specific to your business, injuries on your property, and off-premises product liability. You also get some protection in the event of a fire or a robbery. Worker’s compensation is not included.

  4. Commercial package policy. Yet another step up, a commercial package policy includes worker’s comp and added layers of protection.

A BOP works for most home businesses. Your best bet is to work with an agent who understands the ins and outs of your particular business.