Do I Need Separate Insurance for a Home-based Business?

According to the U.S. Small Business Administration, about 50% of all small businesses are based in people’s homes. This leads to an important question for these types of business owners: Do you need separate insurance for an at-home business? The answer is a complicated one. 

Does My Home-based Business Need Insurance? 

At-home businesses can vary greatly, which means their insurance needs vary too. There are three common insurance options for at-home business owners to choose from: 

1. A homeowners policy endorsement is the most simple and affordable option. It is an add-on to your homeowners policy. It is a good option for a business that doesn’t manufacture any goods and if it is a small/solo business. 

2. An in-home business policy combines home and business insurance in one plan. This policy is best for mid-level businesses with visitors/clients, equipment and output. An in-home business policy may include more extensive property and liability coverage, as well as business interruption coverage.  

3. A business owners policy is the most comprehensive option. It offers protection from claims filed by contractors, customers or employees. It also includes other forms of liability and property coverage. A home-based business must meet specific requirements to qualify for this type of policy. 

Types of Work-From-Home Businesses That Need Insurance 

You should consider getting a business insurance policy if you operate one of the following types of businesses from your home: 

• E-commerce store—Business insurance may help cover your inventory if a covered incident occurs.

• Photography—Business insurance may help cover your expensive photography equipment whether an incident happens at your home or on location for a shoot.

• Freelance writing/marketing—Business insurance coverage can help cover your equipment and provide business interruption coverage if you cannot work due to a covered event.

• Bakery—Business insurance may help cover your equipment and inventory with liability insurance. Auto liability coverage may also be necessary if you deliver your baked goods.

Insurance for Remote Businesses in Little Rock, AR 

It’s essential to discuss your specific situation with a qualified insurance provider to determine what coverage is best for your home and business. If you are in the Little Rock area, contact Sunstar Insurance of Arkansas. We can make sure you have the insurance you need to operate your business with confidence. 

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.