What insurance do I need for my home business? This is a question asked by many small business owners that operate their businesses from the comfort of their homes.
What Insurance Do I Need For My Home Business?
There are lots of things to take into consideration when you start a business from your home. Insurance might be one of the last things on your mind, but it's something important that you should be considering.
If you figure you can just rely on your homeowners insurance policy, then you might be unpleasantly surprised that it won't cover all of your business equipment. And if you are going to be having clients or business partners in your home, then you might need liability insurance. You also might want to have lost income insurance so you're protected if you are unable to work for whatever reason.
If you run a home-based business, you need to ask yourself a few important questions:
- Do customers come to my house?
- Do I keep inventory or business property in my home?
- Would I lose income if I had to close my business because of damage to my home?
- Do I have employees working in or out of my home?
- Do I maintain client or employee records on my computer?
If you answered yes to any of the above questions, your renters or homeowner's policy may not provide enough protection for your small home business.
You basically have a few choices for insuring your home business. What you choose will depend on the type of business you have and the insurance company you buy it from.
Homeowners Policy Endorsement - It's possible you might be able to simply add an endorsement to your already existing homeowners insurance policy. You might be able to increase your limits to include the cost of value of your business equipment such as computers. You also will want to double check to make sure your liability coverage is enough to protect you if clients or delivery people for your business come to your property and get injured.
If you don't get a lot of visitors for your home business, then this will probably be a good option for you to explore. Be honest with your insurance provider and see if they will offer you something like this.
In-Home Business Policy - These types of policies will allow you to have higher coverages for business equipment than a homeowners policy endorsement might allow. The bonus with these is it's possible that they could also reimburse you for the loss of important papers, accounts receivable, and perhaps even any off-site business property.
If your home is damaged by fire or natural disaster, it's possible the policy will pay for lost income while your business was interrupted. If you have employees in your home business, then some policies might allow for coverages for them as well.
General Liability Policy - If you don't have inventory or business property in your home, you might only need a general liability only policy. This will protect you if you're sued for negligence, personal injury like a sip-and-fall or a faulty product you make.
Business Owners Policy (BOP) - The final type of policy that you might consider purchasing was created specifically with the small business in mind. The policy will cover both business equipment and property, loss of income, and provides you with liability insurance. A BOP is a great option if your business operates in more than one place. If you have employees, you'll need to get separate coverages for workers compensation and health or disability insurance.
Types Of Home Based Businesses That Could Be Eligible For Commercial Insurance
Following are a list of home-based businesses that are eligble for small business insurance with certain insurance carriers. This is not an exhastive list:
- Abstracting and indexing service
- Accounting service
- Adjuster/Independent claims adjuster
- Adjuster/Public claims adjuster
- Administrative support service
- Advertising agency/Advertising specialty items sales
- Answering service
- Antique gallery shop
- Appraisal service (non real estate)
- Antique gallery/Art studio
- Artists supplies
- Association management service
- Auctioneers (away from insured's premises)
- Audit service (non-financial)
- Background checking/Screening service
- Balloon art
- Barber supplies
- Beauty supplies
- Billing service
- Book/Magazine distributor
- Bookkeeping service
- Camera/Photography sales or repair
- Candle sales (excluding sales of candles made by individuals )
- Candy/Nut confections
- Car detailer
- Cell phone/Pager sales
- Clock or watch repair
- Clowns, magicians, entertainers (excluding bands)*
- Coaching service
- Computer repair
- Computer sales
- Computer service bureau
- Cosmetic sales (Avon, Mary Kay, etc.)
- Computer repair
- Computer sales
- Court reporter
- Crafts (excluding manufacturing/distribution of candles made by individuals)
- Damage appraiser
- Dance instructor
- Database management
- Desktop publishing
- Disc jockey
- Dry food products/Mixes vendor
- Editorial service/Proofreader
- Education consultant
- Employment agency
- Financial planning (exclude discretionary trading authority and/or access to customer funds)*
- Floral arrangement
- Food broker
- Food supplements/Vitamins
- Fund raising service
- Furniture refinisher
- Games puzzles vendor
- Gift delivery service (balloons, gift baskets, etc...)
- Gift Shop (excluding manufacturing/distribution of candles made by individuals)
- Grant writing service
- Graphic artist/Designer
- *Not eligible for Professional Liability coverage:
- Handicrafts (excluding manufacturing/distribution of candles made by individuals)
- Hearing aid sales
- Hobby and model supplies (excluding explosives and propellants)
- Household products (Amway, Fuller Brush, etc...)
- Information search retrieval
- Insurance agent
- Insurance inspector
- Insurance risk manager
- Interior decorating
- Interior window treatments
- Inventory control specialist
- Jewelry (Costume)
- Kitchen supplies (Tupperware, etc...)
- Ladies and girls clothing and accessories
- Leather goods
- Loan origination service
- Management consultant
- Manufacturers representative
- Market research
- Marketing consultant
- Medical claims processing/Transcriptionist
- Men's and boy's clothing and accessories
- Mortgage field inspection
- Musical instrument sales/Repair
- Newspaper/Magazine/Book delivery
- Notary public
- Office supplies vendor
- Paper goods
- Personal care products
- Personal fitness trainer
- Personalized books and gifts
- Picture framing
- Prepaid calling card vendor (excluding sales from vending machines)
- Print broker
- Professional organizer
- Professional speaker
- Real estate agent
- Registered agent
- Religious goods
- Resume service
- Retail toy sales
- Rubber stamp business
- Secretarial service
- Shoe repair
- Sign painting
- Tailoring, alterations, seamstress
- Tax preparer
- Teacher/Tutor (except sports, physical education, industrial or martial arts)
- Telemarketing, telephone solicitation
- Toner cartridge recharging
- Training specialist/Seminar conductor
- Transcribing/Court reporter
- Travel agent
- Trophy sales
- TV/VCR repair
- Video and music Sales/Rental
- Videotaping, dubbing, editing
- Vinyl/Leather repair
- Wedding and party planner
- Wedding cake and/or cookie sales
- Wood furniture crafter
- Wood products (excluding toys and furniture making)
- Word processing
What Insurance Do I Need For My Home Business? - The Bottom Line
We hope this article on what insurance do I need for my home business? has been informative. When you work for someone else, they are responsible for providing the insurance. When you work for yourself, though, you get control over a lot of different things, and this will include protecting yourself and your equipment so you can successfully run your business and continue providing for your family. Make sure you shop around to find the right policy for your particular circumstances. And don't forget, insurance is a business expense if it's purchased for your business.