A Guide to Business Insurance for Home-based Businesses
Operating a business from the friendly confines of your home may help you save on overall expenses and enjoy a comfortable environment. Still, whether you’re providing services from a home office, working on vehicles and machinery in your garage or otherwise using your home for commercial purposes, you’ll need to address specific business-related risks and exposures. Understanding your insurance needs and procuring appropriate policies is nonnegotiable.
Does My Home Insurance Cover My Home-based Business?
Generally, you should not expect your homeowners insurance policy to address business-related coverage needs. Most standard home insurance policies explicitly exclude losses arising from commercial activities, even if your business is specifically based in the insured residence. This means that incidents affecting your business equipment, such as laptops, tools and inventory, will not be covered. Additionally, third-party losses for which you’re at fault, such as if a client is injured while visiting your home, would need to be paid out of pocket.
How Can I Insure My Business? 
Since your standard home insurance is likely insufficient for your business’s coverage needs, you’ll need to explore alternative arrangements. Consider the following options:
- Business owners policies (BOPs)—These policies are often ideal for small- and medium-sized businesses, including those based out of a residential property. Your BOP can bundle several essential forms of coverage, including general liability, commercial property and business interruption insurance. You can file a claim following various incidents that might affect third parties, as well as your business property and income.
- Home insurance endorsements—In some cases, home insurance companies may offer endorsements or riders that can be added to your standard policy. This approach may represent a cost-effective and convenient way to retain additional coverage for business-related losses. However, not all carriers may offer these options, and you should expect your home insurance premiums to increase.
We’re Here to Help
Contact Metro One Insurance Agency in Oklahoma City today to learn about insuring your home-based business.
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.