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Insurance for Home Based Businesses

Home Office

Side hustles are so popular right now because you can “work from home.” Home based businesses means flexibility to the millennial generation but what does this mean for  homeowners insurance policies? 

Your homeowners policy is designed to  provide coverage for personal risks. It does not include coverage for any event that arises from a business exposure. Many people with home-based businesses don’t realize this.

Home Based Businesses: Property Risk

You can add some coverage for business contents to your homeowners policy for additional premium. The coverage limit is minimal and is really designed to cover business contents like a computer. It is not typically included on your policy unless you request it. It is also not designed to cover inventory or client data.

Home Based Businesses: Liability Risk

Do you host people in your home as a means of selling your product? Do you host parties outside of your home as a means of selling your product? Your homeowners policy would not extend liability coverage for these scenarios.

The Implications

Direct Sales companies usually offer insurance for the teams of people they recruit. We can’t speak for their policy but often those policies are not completely comprehensive in nature. Working for yourself opens up an entirely different discussion. No coverage would be in place without the purchase of a commercial insurance policy. The primary job of an insurance professional is to ensure that you are not susceptible to a large financial loss based on loopholes and legal jargon. A local agent can look at your needs from a broader perspective. They are working with more than one piece of the information.

To learn more about the different types of business insurance available to you click here.