Running a small business from home? That’s a huge win if you’re looking for more freedom, flexibility, and the chance to be close to your loved ones every day. It’s tempting to think your homeowners or renters insurance will cover anything business-related that comes up. But while they do offer some protection, they’re not designed to handle the specific risks that come with running a business from home.
Home-based business insurance is here to make sure your business is covered. It protects your office equipment, like computers and printers, and helps with unexpected losses—like a data breach or equipment damage. Plus, it includes liability protection, so if a client or delivery person gets injured while at your home office, you’re fully covered.
With options that let you pick what suits your business best, home-based business insurance can give you the peace of mind regular homeowners or renters insurance just can’t match.
Home-Based Businesses Are Bigger Than You Think
Home-based businesses have evolved over the years. Gone are the days of just networking events or sales parties—today, a home-based business could be anything from a one-person operation turning a passion into profit, to a full-fledged company with a team of employees. Check out these eye-opening stats that show just how diverse the world of home-based businesses has become:
- Not Just Freelancing: About 67% of home-based businesses don’t fit into traditional roles like freelancing, consulting, or virtual work.
- Startups Begin at Home: Roughly 69% of new businesses launch from home, and 59% are still operating there over three years later.
- Employees on Board: An impressive 75% of home-based businesses have employees.
- Women in Business: 72% of women-owned businesses run from home.
- Founders of All Ages: Entrepreneurs come from every age group, with 5% being young up-and-comers and 25% retirees.
These stats reveal a world of flexible, resilient businesses thriving in home offices, spare rooms, and garages—proof that home-based ventures are anything but small-time.
What’s Home-Based Business Insurance All About?
If you’re running a business from home, home-based business insurance is your go-to solution. While homeowners insurance covers your personal items, it usually won’t protect your business stuff. This type of insurance is designed to fill in the gaps, offering customizable coverage to match the unique needs of your business.
Do You Really Need It?
You might be relying on your homeowners or renters insurance to cover your business gear, but most policies cap coverage for business items at just $2,500. That’s not nearly enough if something valuable gets lost or damaged. And even if you have a detached garage or shed, those spaces typically aren’t covered for business activities.
Without business insurance, you could be on the hook for hefty expenses, like legal fees or property damage. Plus, if you’re running a business at home and haven’t informed your insurance provider, they could cancel your policy altogether. It’s a good idea to add a homeowners endorsement for business use or look into a separate business insurance policy.
Whether you’ve got a part-time side hustle, a seasonal gig, or a full-time business running from home, it’s important to think about the risks you’re facing and what kind of insurance you’ll need. Even running a business from the comfort of your home can come with challenges, but the right insurance can help ease the stress and provide a safety net.
The type of insurance you’ll need depends on your business. For example, an accountant working solo from home will have different coverage needs than someone offering childcare services. When shopping for insurance, here are a few key questions to ask yourself:
- What kind of business am I running? Every type of business has unique risks—whether you’re selling products, offering services, or holding customer data.
- What’s the value of my business property? Do you own pricey equipment, like cameras or commercial-grade printers, or keep valuable inventory like gemstones?
- Do I have employees?
- Do clients or contractors visit my home for business?
- Do I use my personal car or another business vehicle?
- Am I storing sensitive customer data on a computer or in the cloud?
Types of Home Businesses That Need Insurance
A wide range of businesses can benefit from the additional protection business insurance provides. Common examples include:
- Small retailers (clothing, jewelry makers)
- Consultants and coaches
- Accountants, bookkeepers, and other service providers
- Graphic designers
- E-commerce sellers
- Beauty services (hairdressers, nail techs)
- In-home childcare
If your business has employees, you may also need workers’ compensation insurance.
Types of Insurance for Home-Based Businesses
Here are some coverage options for handling business-related risks:
Homeowners Insurance Endorsement
Did you know you might be able to add a business endorsement to your current homeowners’ policy? This can increase your coverage for business-related items, like your office equipment or computer, and it usually boosts your limit in $2,500 increments—up to $10,000 total.
Standalone Business Insurance Policy
If you need more extensive coverage, a standalone business policy might be the way to go. Popular options include:
- Business Owners Policy (BOP): A BOP combines several protections, covering your business property, equipment, liability, and even lost income if you’re temporarily unable to work from home.
- General Liability Insurance: Protects against third-party claims if a client or customer is injured at your home office. It also covers personal injury claims, like libel or slander.
- Professional Liability Insurance: If your business provides advice or services for a fee, professional liability insurance (also called errors and omissions) protects against claims of negligence or mistakes that cost a client money.
- Workers’ Compensation: If your home-based business has employees, workers’ comp is essential. It covers medical expenses and lost wages if an employee gets hurt on the job.
With all the coverage options out there, home-based business insurance ensures you can protect your business essentials and personal property, giving you peace of mind no matter what life throws your way.
How Much Does Home-Based Business Insurance Cost?
The price of home-based business insurance can differ a lot depending on several factors, including:
- The type of business you run
- Your home’s location
- Number of employees
- Business size
- Coverage options you choose
- Past claims history
- Industry-related risks
Additionally, the amount of business property you need to insure, like equipment or inventory, affects the total cost. Make sure to evaluate how much business-related property you have to get the right amount of coverage for peace of mind.
Should Your Insurer Know About Your Home-Based Business?
Running a business from home without letting your homeowner’s insurer know can be risky. Many people don’t realize it, but failing to inform your insurance provider could cancel your coverage. If something unexpected happens, your business and home might not be protected, and that’s a situation you don’t want to find yourself in.
How to Get Home-Based Business Insurance
Buying home-based business insurance comes down to a few essential steps:
- Evaluate Your Business Risks: Start by assessing the specific risks of your business. Think about things like the number of employees, any company vehicles, and equipment, or whether you need professional liability coverage.
- Reach Out to Insurance Providers with Home-Based Coverage Options: Not every insurance company offers all types of coverage for home-based businesses, so look for providers who specialize in the options you need.
- Get Multiple Quotes: Collecting quotes from a few companies gives you a side-by-side look at costs and coverage options, helping you spot the best value and ensuring you choose the provider that meets your needs.
Secure Your Home-Based Business with Alexander Agency of St. Charles
Building a business from home? The Alexander Insurance Agency of St. Charles can help you protect it every step of the way. We specialize in home-based business insurance and understand the unique needs of entrepreneurs like you. With our flexible coverage, you can secure your equipment, cover your liability, and stay prepared for anything unexpected.
Our insurance plans cover everything from property to liability, giving you the peace of mind to run your business without worry. Reach out to Alexander Insurance Agency to explore the coverage options that fit your business, and let us take care of the insurance so you can focus on what really matters.