If you run your business from your home, it may not be covered by your home insurance! This is because home insurance is not designed to cover business risks. If you operate a business from home, you have two potential options:
- Adding a home-based business endorsement to your home insurance policy.
- Purchasing separate commercial insurance for your business.
Both options involve informing your insurance company and working with your broker to find the right solution for your company’s needs.
Why doesn’t home insurance cover my business?
Home insurance is not designed for business exposure. In fact, your insurance company will not cover any commercial property or liability.
With the proper endorsement or a separate insurance policy, you can protect your company’s property and liability.
Home-Based Business Endorsement
Depending on your business and insurance company, you may be able to insure your company through a home-based business endorsement. This is an add-on coverage offered by some home insurers that will extend your coverage to include commercial property and liability risk.
You’ll need to discuss with your broker if your business is eligible and if it is adequate protection for your needs.
Separate Commercial Insurance
Your business may require separate commercial insurance. There are many different types of commercial insurance, so work with your broker to determine what your company needs. The most common types of coverage include:
- Commercial Property – covers your company’s commercial property such as inventory, materials, equipment, tools, furniture and more.
- Commercial General Liability – covers your company’s expenses if a third party is hurt or has their property damaged due to your negligent acts. For example, a customer is walking to your house for a meeting, slips on the steps, gets hurt and sues you.
- Professional Liability – also known as errors and omissions coverage, this covers your company’s expenses if a third party sues you for causing them financial loss due to your professional service or advice (or failure to provide it).
- Cyber Coverage – Helps cover expenses related to a cyberattack or data breach.
Your broker will advise you which protections your company should have.