If your home sweet home is also the headquarters of your small business, don’t make the mistake of assuming you can go without commercial insurance coverage. Many owners of home-based businesses don’t understand their risks.
Many small business owners who work from home, from consultants to online retailers to wedding planners, incorrectly assume that their home insurance has got them covered. But the reality is, most home-based enterprises need business insurance.
More than half of small businesses are based out of the owner’s home, according to the U.S. Small Business Administration. Many of those home-based business are underinsured, and some owners don’t learn what coverage they really need until after a costly incident occurs.
The fact is, homeowners policies are not designed to cover businesses. A typical home policy might cover business property damage only up to $2,500 on premises and $250 off premises. And a home policy likely will not cover liability if, for example, a customer slips and falls at your home office.
Insurance needs will vary based on the nuts and bolts of your business, so it’s a good idea to talk with an experienced insurance professional to determine what coverage to get for your home business. In general, these are your three main options for home-based business insurance: