Will Homeowners Insurance Cover Your Home-Based Business?

Posted September 06, 2023 in Homeowners Insurance

Running your business from home offers you freedoms and opportunities that you might not encounter with a brick-and-mortar establishment, but this practice carries some risk.

Many home-run businesses rely on their homeowners insurance to cover losses, but the truth is that this plan may not be sufficient.

If you have a home-run business, you may consider adding an endorsement to your current policy or purchasing a separate business insurance policy to cover your home-based business.

If you want to learn more about your business insurance options or purchase more coverage for your home-based business, contact the team at Gallant Risk & Insurance Services, Inc., in Southern California. Call us at (951) 368-0700 or complete our online contact form.

What Will My Homeowners Insurance Cover?

If you run your business out of your home, you will likely need coverage beyond the typical homeowners policy. This includes insurance for artists, tutors, accountants, advisors, freelance writers, personal trainers and translators.

A standard home insurance policy covers only up to $2,500 of business property. Therefore, if you lose a product or equipment for your business that is more than that, you will have to pay out of pocket.

If you run your business out of a detached garage, shed, or camper on your property, your home insurance will most likely exclude it from your policy entirely. “Other structures” are not associated as part of the home; therefore, they are not covered.

Photographers, makeup artists, musicians, or anyone whose home business involves expensive equipment used away from home are not allowed to have these items listed or protected under the standard home insurance policy. These policies typically have a $500 limit on business property that’s away from the resident’s premises.

Types of Home-Based Businesses That May Need Additional Insurance

Even if your business is on your property, with no business-related property used outside the premises, you may still be at risk.

Accountants and tax preparers, web design firms, online goods sales, caterers and food sales businesses all need additional coverage.

What Are My Home-Based Business Insurance Options?

There are a few insurance options for you, depending on the nature of your business and the amount of coverage you’ll need.

A separate business insurance policy can cover damages incurred to your business property, or you may need a general liability policy that covers bodily injury, property damage, personal injury and products.

You may also consider adding an endorsement to your current homeowners insurance policy. Most homeowners insurance companies allow you to double your standard policy limits for business property from $2,500 to $5,000 for less than $20 annually.

This may be a good option for smaller businesses with little property.

The Bottom Line

Don’t assume your homeowners insurance is sufficient to protect your small business. Your business is your livelihood and should be protected and cared for just as you would your car, home and health.

Our consultants at Gallant Risk & Insurance can help you decide on the policy best tailored to your business and needs. Call us today to get started.