YOU ASK:

What kind of home-based business insurance can I get?

WE ANSWER:

The majority of Homeowners insurance providers specifically exclude home-based businesses from their policies. So if you are running a business from your home, any liability that may arise out of your business operations is not covered under your home insurance policy.

To get protection against home-based business liability, you can either pay extra and add certain endorsements to your existing Homeowners policy, or get a separate Business-owners policy.

Home-Based Business Exclusions

  • Business-related liability.

    Any liability that may arise out of your business operations on or off the premises of your personal property, is specifically excluded from your Homeowners policy. If your business is based in your home and someone gets injured while being in your property, your Homeowners policy will not cover any damages resulting from your liability.

  • Workers' compensation.

    If your employees happen to be injured while working for your home-based business, your Homeowners policy will not protect you from liability.

  • Product liability.

    Your home insurance policy does not cover any liability that may arise out of injury caused by a defective product that your home-based business sells or distributes.

  • Professional liability.

    If your professional duties involve providing services and you work from home, any liability caused by your errors or omissions is specifically excluded from your home insurance policy.

Ways to Insure a Home-Based Business

There are several insurance options available to you if you work from home:

Home Insurance Endorsements

The home-based business endorsement coverage varies from company to company but what is characteristic of these provisions, in general, is that they have too many restrictions. They cover business liability that occurs on the premises of the insured but typically exclude any off-premises liability.

Home-business endorsements are a good option for people who work for somebody else from their homes.

Business-Owners Policies

If you are the owner of a small business that is based at your home, a business-owner policy is probably your best liability insurance solution. It is fairly cheap (around $300 a year) and provides a more comprehensive coverage than any home insurance endorsement under the sun.

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