Do You Need Extra Insurance for a Home Business?

Starting a home business can be an exciting and rewarding endeavor, but it can also introduce unique risks that standard homeowners insurance may not cover. Whether you’re running a small online store, offering professional services or crafting handmade goods, understanding the limitations of your existing insurance and exploring additional coverage options is crucial.

Understanding Coverage Limitations

Homeowners insurance might offer limited coverage for business-related property, but this amount may be insufficient for most business equipment or inventory. Additionally, homeowners insurance often excludes coverage for structures used for business purposes, such as a detached garage.

Types of Home-Based Business Insurance

To adequately protect your home business, consider the following types of insurance:

• Endorsements to homeowners insurance—Some insurers offer endorsements that extend your homeowners policy to cover business-related risks. This can include higher limits for business property and liability coverage for business activities.
• Business owners policy (BOP)—A BOP typically combines property and liability insurance into one package. It can help financially cover business equipment, inventory and liability for injuries or damages related to your business.
• Stand-alone business insurance—For more extensive coverage, you might opt for a separate business insurance policy. This can offer tailored protection based on the specific risks your business faces.

Assessing Your Needs

Consider the nature of your business and the risks involved. If clients visit your home, you need liability coverage in case of accidents. If you store significant inventory, you need adequate property coverage. Evaluate your business activities and consult with an insurance provider to determine suitable coverage options.

Learn More

For homeowners and business insurance near you, contact American West Insurance Agency Inc.

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.