If you work out of your home, there’s a good chance you need specific business insurance coverage. Even if you have homeowners or renters insurance, your policy may not do enough to meet your needs. Depending on the kind of business you have, you have several insurance options to consider.
What to Protect in a Home Business
Several aspects of an at-home business could require additional coverage:
1. Equipment and supplies
If you use computers or other equipment as well as inventory and supplies to do business out of your home, you probably need more coverage than what you may be getting from your homeowners policy, which typically won’t protect anything beyond your personal belongings.
2. Business papers
A regular homeowners or renters policy doesn’t usually protect business documents, such as financial records or intellectual property
If you work at home a lot even though you have an office, consider additional coverage to protect you from work-related incidents. This might become an issue if an employee or client is injured at your home, for example.
Types of Business Insurance
Insurance coverage for your home business should be tailored to fit your needs. Here are the most common types of insurance to consider:
1. Errors and Omissions Insurance (E&O)
Errors and omissions coverage protects against third party claims, including being sued for negligence or misrepresentation.
2. In-home Business Insurance
In-home business policies can cover losses, potentially up to about $10,000. Typically, these types of policies cover injury and theft.
3. Business Owners Insurance (BOP)
If you need more than $10,000 in coverage, you may want business owners insurance, which offers the most comprehensive coverage. This is ideal for larger home-based businesses. Coverage generally includes:
- Loss or damage to business assets, equipment and documents
- Liability for professional protection and for injuries to employees, contractors and clients
- Loss of income due to a negative event or other risk
4. Homeowners Insurance Rider
A rider to homeowners insurance can be a good option for a one-person business with limited risk exposure, minimal equipment and no visitors. It covers some protection for equipment and offers liability coverage in the case of a third-party injury in the home.
Read your home or rental insurance policy to see what it covers and talk with your provider about what kinds of coverage would suit your home business best.
For more comprehensive information, including industry-specific coverage, visit our Business Insurance page.