Do I Need Insurance for My Home Business? Part 1: Liability

November 16, 2017

Part 1: Liability

Running your business from home sweet home? Don’t be caught uninsured!

According to the US Small Business Administration, more than half of small businesses are based out of the owner’s home. But homeowner’s policies are not meant to cover business-related incidents, such as a client slipping and falling while visiting your home office. If you run a business from home, you’ll need to secure some form of liability in case of an accident.

There are a variety of options for liability coverage, depending on factors like revenue and operations:

  • Homeowner’s rider: an add-on for very small businesses. This is basically additional liability coverage for your existing homeowner’s policy, but it’s only available to businesses that are more “hobby” than “livelihood,” or that will likely have very little liability exposure.
  • General business liability: the most basic business coverage. It covers bodily injury (slip/trip/fall), property damage (accidental damage caused while working), and personal injury (slander/libel, false advertising, etc.). Like any liability policy, this is only for damage caused by you to another party.
  • Business owner’s policy (BOP): a package policy to cover multiple aspects of your business. A BOP is far more comprehensive than simple liability, but it’s also not necessary for everyone. In addition to general liability coverage, this combined policy covers business equipment/property in the event of theft, fire, or other disaster, AND it covers lost income and operating expenses if covered damage to your home forces you to temporarily close your business.

Not sure what type of policy is appropriate for your home-based business? We happen to be experts in the field. Call us at (360) 378-2949.