Businesses all have to start somewhere, and most begin in the home due to benefits like low startup costs, flexibility, tax benefits, and freedom from commuting.
Therefore, it isn’t unusual to ask the question “Does Home Insurance Cover Home-Based Business?” Of course, since your work-related activities are taking place in your home, it is easy to assume that your home insurance policy automatically covers your home-based business but that might not be the case.
Home Insurance Coverage and Exclusions
Home insurance covers personal-use movable property and, while this may extend to some business property stored at your home, there’ll be no coverage for your merchandise, computers, or other specialized equipment.
Also, home insurance covers liability in the form of a physical injury or property damage to a third party, but it is not so if the casualty occurred in the course of your business activities.
Other exclusions in a homeowners insurance policy for home-based business include no coverage for data loss, business records, loss of income in the case of a damaged home leading to inability to run your business, etc.
Basically, homeowners insurance only covers structures at your home address excluding separate ones used for any kind of business purposes, which is why your business might not be covered by your homeowners policy. However, you can visit your insurer to make certain adjustments that will suit your needs and situation perfectly.
Coverage for Home-Based Business
In order to get full coverage for your home-based business without second-guessing, you can look into purchasing either of these two types of home-based business coverage.
- Home-based Coverage Added to Home Insurance: This is a low-cost option for self-employed workers and small businesses conducting their activities from home. It covers damages to business property and whatever liability that occurs from the use of the premises.
- Separate Home-based Coverage: This option offers a wider range of coverage ranging from the building where your business is conducted, furniture, equipment, merchandise, stock, losses due to an interruption in activities, privacy breaches, and other related liability. Adding an errors and omissions coverage will protect you from casualty or errors like financial losses or personal injuries that occur during your business activities. This business insurance can also be tailored to meet the needs of your business by protecting you in all possible situations.
Some of the other coverage you can consider for your home-based business includes
- commercial auto insurance coverage to cover company-owned vehicles used for business purposes
- workers’ compensation insurance coverage which takes into consideration the number of workers employed by your business.
Rather than waiting until there’s a problem, get in touch with an insurance agent today to find out more on how to get the best protection coverage for your business. For more information and guidance, contact the experts at First Insurance Solutions today. We are ready to assist you with all your business insurance needs.