Insuring Your Home-Based Business

Insuring Your Home-Based Business

A significant percentage of businesses are home-based.  There are a lot of advantages to running a business from your house but like any business, you need to make sure you have insurance.  While you have homeowners coverage on your house, most policies will not cover your business operations, or only offer limited coverage. Typical Homeowner’s policies will only cover up to $2,500 for your personal property used for the business at your home, and for off-premises, they will only cover $250.

You want to protect your business, both for your business equipment and for your liability exposure from your business operations. If you are selling a product, you will need to make sure that you have Products coverage.  For those that have clients coming to their house, Premises Liability is important in case your client is injured on your premises. Property coverage for your business equipment is necessary, which may need covered both in and out of the home, depending on the type of business. 

There are three ways to ensure that your business is covered.

Endorse your Homeowners Policy

Some carriers will let smaller home-based businesses add limited property and liability coverage to their policy by Endorsement.  This is a cost-effective way to add coverage for smaller home-business risks to make sure their business equipment is covered fully.

In-Home Business Policy

Several insurance carriers offer In-Home Business policies designed for small In-Home businesses.  They will usually have lower limits than a full commercial policy but will provide General Liability, Property, and Business Income coverage for a lower price than a full Commercial policy. 

Eligibility is usually dependent on what type of business is being run out of the home.

Business Owners Package Policy – BOP

A Business Owners policy, or a BOP, is a package policy designed for small businesses to cover their Liability and Property exposure.  For a more complex In-Home business, this is usually the best option because it will provide the most coverage.  Coverage is broader than what an In-Home Business Policy covers.

A BOP is the best way to prevent coverage gaps.  Most carriers will allow coverage to be tailored, adding extra coverage options by endorsement, for coverages such as data breach coverage.

Other Coverage to Consider

If you are using your auto primarily for business use, then your personal auto insurer will likely not provide coverage in the event of a claim. A business auto policy will provide you with the coverage you need for your business, such as owned vehicles, hired autos, or non-owned autos (for employees using their vehicle during the course of their employment).

Professional Liability Insurance, also known as Errors and Omissions coverage is necessary for a Home-Based business that provides a service to its clients.  Consultants, lawyers, accountants, etc, should have this coverage because it covers third-party claims stemming from a mistake made by your business.

If you have any employees working for you, even if they are not working at your premises and are working remotely, you will need to provide Workers’ Compensation coverage for them.  

At Fixated Financial and Insurance Solutions, we are in the business of making sure that YOUR business is protected. We have options for In-Home Business Policies and BOP policies for your Home-Based business for all lines of coverage, including Property, Liability, Auto, Workers Compensation, Professional Liability, and Employment Practices Liability.  Contact us today to find out how we can help you or to get a no-obligation quote.