Whether it’s their primary occupation or a side-hustle, many Albertans operate a business from their home. But did you know that this can impact your home insurance or that your business materials may not be covered? A home-based business comes with special insurance considerations, which is why you should discuss your individual situation with one of our brokers to ensure you have the right protection.
In this article, we’ll review home-based business insurance in Alberta and answer your most frequently asked questions.
Do I need insurance for my home-based business in Alberta?
Yes, if you are running a business from your home, you will need special insurance for your home-based business in Alberta. The exact type of coverage you need will depend on your business. Generally, you will either need a special endorsement (add-on) for your home insurance or you will need separate business insurance policies such as commercial property and commercial general liability insurance.
Why do I need insurance for my home-based business?
You need insurance for your home-based business insurance in Alberta because your home insurance is not designed to cover commercial risks. If an unexpected disaster happens, your home insurance will not cover your damaged business property. It will also not provide protection if a client sues your business. You would need to pay out of pocket.
What type of insurance do I need for a home-based business in Alberta?
The type of insurance you need for a home-based business in Alberta will depend on the individual business. There are a few options:
- Add a home-based business endorsement for your home insurance
- Get a separate business insurance policy
Which option is best for you will depend on a number of factors, including:
- Your industry
- Your business operations
- Annual revenue of your business
- If you have employees or not
- The value of your commercial property
Talk to your broker and they’ll advise which type of insurance is best for your needs.
Home-Based Business Insurance in Alberta
Generally, you want your home-based business insurance to protect your commercial property and cover your company’s liability. Some insurers offer an endorsement to their home insurance to cover a small home-based business. This coverage can be limited and is only designed for certain types of home-based businesses. It is also not offered by all insurance companies.
In other cases, you’ll need to purchase a separate policy or package (this generally includes commercial property and general liability protection). Your business may require other types of protection, depending on what you do. A broker can help you determine which types of protection you need and they can also get you the most competitive rates.
Is having a home-based business the same as working from home?
No, working from home is not the same as operating a home-based business in Alberta. Generally, insurance companies are only concerned if you are the owner/operator of a business. For example, if you work for a company and are working from home during the pandemic, you don’t need to inform your insurance company. However, if you’ve started your own business or work as a freelancer, you should discuss with your broker.
Do I need to notify my broker if I start a home-based business in Alberta?
Yes, you should notify your broker and insurance company if you start a home-based business in Alberta. This is because it changes the “material risk” of your home insurance. Failure to notify them can have consequences such as having claims fully or partially denied or not having your company’s property covered if something unexpected happens. Contact your broker if you’ve got a home-based business to ensure you have the right coverage in place.