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Encompass® Agency Insights

Home Business Insurance Options

Building a business out of your home is a huge challenge, but for some people it proves to be rewarding. There is a lot to learn and to think about as you get started and grow your small business. It isn't surprising that many home-based business owners are often at a loss about what they need in terms of insurance. Understand the challenges and you will be better prepared to navigate these difficult waters.

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Does My Homeowners Insurance Cover My Home-Based Business?

In some cases, your homeowners coverage may not cover everything for your business. However, it can be possible in some states to add a "rider" to your policy to cover your home-based business. This could be an option for an inventory-based business where you are storing product versus a more service-based operation. It's best to know what types of insurance are available to help in your search for the right coverage.

Main Types of Business Insurance

Depending on exactly how you operate your business, you may need one or more types of insurance. Begin with learning the basics of these six common types of business insurance, which the Small Business Administration mentions may be recommended for some home businesses.

  • General Liability Insurance - Protection from financial loss from injury, damaged property, medical expenses, slander, libel, lawsuits, settlements or certain other issues that could occur in the course of running your business.
  • Product Liability Insurance - For companies that manufacture or distribute products, it is a more specialized type of liability insurance.
  • Professional Liability Insurance - Professional liability insurance is a type of malpractice, error and negligence insurance.
  • Home-based Business Insurance - Home-based business insurance is a rider that could be added to a homeowners insurance policy to add additional protections for a home-based company's inventory and supplies.
  • Business Owner's Policy - This is an insurance bundling option that puts together many common types of business insurance into one easy (and often more affordable) package.

When it comes to protecting your home business, everyone's needs will be different. Contact your local independent insurance agent discuss your insurance needs as a home-based business owner.

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