What Kind of Insurance Do Home-Based Businesses Need? 

You can go to work in your pajamas. Take five to feed the dog. Work six hours one day and 10 the next — whatever it takes. And all you really need is your laptop, phone, motivation, and focus… right? 

Have you considered insurance for your home business? Do you have what you need in that area? And just what is it that you require in the way of home-based business insurance? 

Why Home-Based Businesses Still Need Insurance 

Things can happen at work – just like they do in the rest of your life. When mishaps do occur, your insurance agent basically says that your personal life and your business life are two different things. As a result, your homeowners policy might sometimes cover a work-related claim, but in a limited fashion that might not come close to covering your loss. 

That’s why, if you’re in business for yourself — regardless of where your workplace is located — you need one or several lines of commercial insurance. 

Common Risks You Might Not Expect at Home 

A driver delivering inventory you keep in your garage falls and gets injured on your icy front steps. The medical expenses and court costs are on you. 

A deadline is missed because you had to pick up a sick child from school, and your client sues you for breach of contract. 

Consider both cases. Your homeowners policy has liability coverage to protect you against the threat of legal claims such as the injured delivery person — but probably not when the topic is commercial. 

How Personal Insurance Falls Short for Business Risks 

You likely have limits of just $2,500 in damages in your homeowners policy when the claim is for your company. If you have a house fire, you’re fully covered up to your deductible and coverage limits for your personal possessions, but how far will that $2,500 business coverage go if the fire consumes four computers, a pricey printer, and $10,000 in stored inventory? What will it cost you to recover data in files lost to the flames or smoke? 

Theft is covered the same way. Your homeowners policy fully covers your family’s personal items — but the coverage for your company is limited. 

Here are some of the lines of business coverage you might consider. 

Essential Insurance Types for Home-Based Businesses 

Not every homebound company has the same needs. Do you regularly (or ever) have customers or clients over to the house? Do you have a fleet of vehicles serving your needs? Do you provide contractual services for clients? 

You definitely need some business insurance products — but which ones? Here are some that many home-based companies might find essential. 

General Liability 

Consider the delivery driver who’s injured on your icy steps. He’s only there because of a business matter. It’s the risk of being sued or threatened with legal action for work reasons that you have business liability. 

It protects finances related to bodily injury or a lawsuit from anyone who visits your home for work-related purposes. That could be customers, clients, delivery people, or anyone else. It also protects against product liability charges if you’re manufacturing products in your home or selling those made by vendors. 

You can use business liability coverage to hire your lawyer or pay fines or lawsuit judgments that go against you. 

Professional Liability 

This is similar to general liability, but it covers intellectual damages. For instance, you’re a lawyer who draws up a bad contract. Or an accountant whose error in balancing the books costs a client thousands of dollars. Or an engineer who designs a faulty product for a client that causes injury. 

Professional liability insurance is also called errors and omissions (E&O) coverage because that’s exactly what it’s designed to cover. 

Business Property Coverage 

You may conduct all your work from your converted garage, the kitchen table, or the spare bedroom upstairs. It doesn’t matter. Wherever your home-based business is getting done, your premises and possessions are covered if you have business property insurance. 

In the case of a house fire, you can replace your destroyed electronic devices using claims funds. They’re also covered for theft, internal flooding, or other incidents where your expensive equipment might be lost, damaged, or destroyed. 

Business Interruption Insurance 

Your company could come grinding to a halt for any number of reasons. Consider a burglar who steals all of your electronics, and it takes days to replace everything. Or a fire that wipes out all of your inventory and your in-home manufacturing capabilities. 

Whatever the reason, your business interruption insurance keeps revenue flowing even when your company temporarily stops producing income. 

Cyber Liability Insurance 

Do you work online? A hacker could freeze your accounts for ransom, swipe your cash, steal the identity of your biggest customer — the list of nefarious attacks is endless. 

When data breaches, ransomware, hacker attacks, and other deliberate online acts take place and damage your digital presence, it can get incredibly expensive. That’s when you call your cyber liability coverage agent. 

Your policy covers such events and cost exposures as restoring your damaged data, cyber extortion payments, and legal fees if your cyber attack damages others. 

Commercial Auto Insurance 

Do you drive for work? If you travel to see clients, deliver products, transport customers, or use a vehicle for any other reason, your personal auto policy won’t cover damages while on business. That’s why you need commercial coverage for each and every vehicle you use for work purposes. 

Commercial auto policies work the same way as your personal line of coverage, but it’s solely for when you’re getting the job done. 

FAQs About Covering Your Home-Based Business 

Here’s more information on the home business insurance coverage that might protect your home-based company. 

Does My Homeowners Insurance Cover My Home-Based Business Needs? 

Not well, if at all. For instance, you likely have a $2,500 limit on business property losses. If you have expensive automation, machinery, or other equipment, that’s probably not adequate coverage. And such things as liability aren’t covered at all by your homeowners policy. 

Is There Coverage for Deliveries or Shipments? 

Yes. Your business property insurance will protect incoming shipments once they arrive at your doorstep. If you’re shipping out via your own vehicle or fleet, a commercial auto policy will cover damages. 

Is Business Insurance Required by Law for Home-Based Businesses? 

No. Your coverage isn’t mandated, but the financial benefits — and the risk of not having coverage — are apparent, 

I Run an Etsy Shop or Online Store. Do I Still Need Business Insurance? 

Yes. You still have many of the same exposures as other home-based businesses. This can include product loss or damage, product defect liability, and losses related to shipping or receiving. 

The Right Coverage for Your At-Home Hustle Starts Here 

At Acceptance Insurance, we understand insurance for your home business. We’ve worked with thousands of businesses of all sizes and locations. That includes offices, factories, warehouses, and, yes, home-based companies like yours. 

As independent insurance agents, your Acceptance broker can help you determine all of the lines of coverage you need and then find the ideal and most affordable policy or policies. That’s because independent agents don’t work for one insurer. Instead, they have contractual relationships with multiple carriers and can find the plan that works best at the lowest cost. 

Interested? Give us a call at (877) 405-7102. Or get a quick quote online. You can also find an Acceptance Insurance office near you.