A Home Insurance Policy

Homeowner's Or Business Liability Policies: Which One Is Appropriate For Your Home-Based Business?

5 April 2021 by Isabella Brooks

During much of 2020, many employees across America were forced to work from home. During this time, many found that working from home was the thing that they never knew they needed. In fact, many employees have decided to make the transition into self-employment. 

While those who want to continue to work from home will continue to enjoy vast benefits, they'll also find that if they want to protect themselves financially, and in some cases, legally, they'll be required to purchase an insurance plan for their new work from home business. This means that they'll consider a very logical question: Is their current homeowner's policy enough to provide the coverage they'll need for their business, or will they be required to purchase a separate business insurance policy? 

Here's a look at what each type of policy entails, along with the types of coverage that each policy provides.

Starting with a homeowner's insurance policy, the policy holder can expect to receive financial coverage for a variety of perils that might take place in the future. The perils that are covered are usually those that place a direct impact on the homeowner's ability to reside safely and comfortably inside of their residence. However, there are homeowner's policies that also provide coverage for stand-alone structures on the property. There are also liability coverage policies that protect anyone who suffers an injury while visiting or exiting the homeowner's property. 

While a homeowner's policy does provide financial coverage for the belongings inside of the residence, and while this coverage would include tools such as electronics, the homeowner's policy would not provide the type of business liability coverage that a business insurance policy would offer. A business insurance policy provides comprehensive coverage for business equipment, tools, and supplies inside of the home.

In addition, this type of policy would also protect things such as electronic files and technology that's specifically for business operations. Even more important, a business insurance policy covers business operations that would never be covered under a standard home policy. This includes operations that require clients or customers to come to the owner's home, such as consulting clients, day care customers (and their children), or vendors. A catering business is another example of a home-based service that would require a business policy.  

Not only is purchasing a separate business policy crucial for providing owners the right type of coverage but in many instances, it's a legal requirement. It's crucial for anyone who is starting a small business from home to make sure that they are purchasing the right coverage for all of their needs. 

Contact a local insurance provider to learn more about business insurance.

Share  

Search