How Running a Business From Home Can Impact Insurance

Running a business from home has become a popular way for people to work on their own terms with as much flexibility as possible. However, having a home-based business can affect your insurance needs. Many homeowners assume their standard homeowners insurance policy will cover business-related risks, but that’s not always the case.

The Limits of Homeowners Insurance

Standard homeowners insurance policies are designed to cover your personal property and offer residential liability, not business equipment or commercial activities. The following are examples of limitations to your homeowners insurance policies if you run your business from home:

• Low coverage limits—Business equipment and inventory can be expensive and quickly exceed your homeowners insurance limits, if covered at all.
• No coverage for business liability—If your business operations cause injury to a third party or damage to their property, your homeowners insurance won’t cover it.
• Exclusions for business risks—If you have inventory in your home or manage client data from a home office, you face risk exposures not covered by your homeowners insurance policy.

Consider Additional Coverages

If you conduct your business from home, consider the following supplemental coverages:

• Professional liability insurance may cover claims of negligence or errors in your business services.
• A business owners policy (BOP) can bundle property, business income, and liability coverages for certain small businesses.
• A home-based business endorsement may add limited business coverage to your homeowners insurance policy.
• Cyber liability insurance may be crucial if you store customer data or conduct online transactions from your home.

Contact Us

Running your business from home can offer you increased flexibility, but with it comes a need for increased risk management. The team at Davis Insurance Group in Hickory, NC can help review your homeowners insurance policy and help you get the coverage you need for your business operations. Contact us today for a personalized quote or more information.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.