Why a homeowners policy falls short
A standard homeowners policy is built for personal life, not business activity. Many policies cap coverage for business property at a small amount, and some exclude business activity on the premises altogether.
That can surprise people who work from home, sell products online or see clients in a home office. The details vary by policy and carrier, so it's worth reading the business sections of yours, or asking your agent to walk through them.
Common gaps
- Business equipment, like computers, cameras and tools used for work.
- Inventory and supplies stored at home or in a garage.
- Injuries to clients or delivery people visiting for business.
- Lost business income if a covered loss shuts you down.
- Business records and data.
Home business endorsement
Some carriers offer an endorsement that adds a modest amount of business property and limited liability coverage to your homeowners policy. It can be a fit for small, low-risk work, such as freelancing, bookkeeping or consulting with few visitors. It's often the simplest and least expensive option, but its limits are usually small.
Small business policy
If you have more equipment, inventory or client traffic, a separate business policy may be a better fit. A business owner's policy often combines property and liability coverage, and may include business income. Some businesses also need professional liability, which covers mistakes in the advice or services you provide. Your agent can compare options with you.
Questions to ask yourself
Your answers help decide which option fits.
- Do clients or vendors come to your home?
- How much is your business equipment and inventory worth?
- Would you lose income if you couldn't work from home for a while?
- Do you have employees, or use your car for business?
- Does a contract or client require you to carry business insurance?
Don't forget your car
If you drive for business, such as visiting clients or making deliveries, a personal auto policy may not cover it. Tell your agent how you use your vehicle so they can check.
How CapCenter's insurance agency can help
Our in-house agency compares coverage across multiple carriers and can help you think through the right mix of home and business protection. We review your policy each renewal to make sure you are not paying too much for your insurance.
