While you may be able to conduct business in the comfort of your own home, neither homeowners’ nor renters’ insurance policies cover home based businesses. For that reason, it is wise to find an insurance policy that covers your small business needs.
The type of coverage you need, will depend on the type and size of your business or the industry you work in. Some of the factors that go into this are whether you have inventory or supplies, whether you have intellectual property to protect, if clients or customers come into your home and if you have a separate office apart from your home.
There are a few common home based business policies. These include:
Rider to a home policy: These policies may be best for one person operations where you just need a rider (extra coverage) to be added to the home policy they already have. Riders may be the most affordable option if the business does not have much business equipment or business related visitors coming to the home office. One disadvantage is that a rider does not cover business liability; this would need to be purchased separately.
In home business policy: These typically cover injuries and theft for business with 1-3 employees on payroll (workers comp would need to be obtained with a separate policy though). In home business policies are usually rather affordable and can cover up to $10,000 in losses. They may offer some liability but not always error and omissions coverage which can be purchased separately.
Business owners policy: BOPs are a good option for larger businesses that will need more than $10,000 in coverage. These policies may include coverage for loss or damage to business assets, liability for employees and customers, and loss of income in the event of a covered risk interruption to business.
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AZ Insurance Team
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*