Does your home insurance cover your home-based business?
Even when we dream big, we often have to start small. Many major companies had humble beginnings. For instance, when Steve Jobs founded Apple, he set up company headquarters in his parents’ garage! If you’re launching a business or are self-employed, it’s likely you’re working out of your home, too.
It’s easy to assume that the work-related activities taking place in your home are automatically covered by your home insurance. But is that really the case?
What does home insurance cover?
Whether you’re a homeowner or a tenant, your home insurance first and foremost covers personal-use movable property. Your coverage may extend to some business property stored at your home, but not necessarily to merchandise, computers or specialized equipment.
The same holds true for liability—your home insurance protects you in case of physical injury or property damage to a third party, but not if the casualty occurs in the course of your business activities. For example, if you are an accountant working out of your home and one of your clients falls down the stairs when picking up his tax return, basic home insurance coverage might not protect you in the event of a lawsuit.
There are two types of coverage for home-based businesses:
1. Coverage for home-based workers added to your home insurance
This low-cost option is ideal for self-employed workers and small businesses operating from their private residence. This protection includes $10,000 to $50,000 coverage for business property, as well as liability arising from the use of the premises.
2. Separate coverage for your home-based business
Business insurance offers wider coverage that can extend to all aspects of your business—the building, furniture, equipment, merchandise, stock, operating losses due to an interruption in activities, privacy breaches, as well as liability. If you add errors and omissions coverage to the above, you’ll also be protected in the event a casualty or error that occurs in the course of your professional activities causes personal injury or financial losses. Business insurance is also the most flexible option and can be tailored to the needs of your business, to ensure you’re protected in all possible situations.
Don’t wait for a problem to arise before getting insured. Get in touch with an insurance broker today to find out what type of coverage best suits your needs, or use our online quote tool to learn more about the various options available to you.