The Triangle is full of home-based businesses: bookkeepers and consultants, photographers, bakers, online shops, contractors who run the office from a spare bedroom, and plenty of side businesses that started as a hobby. Working from home keeps costs down. But it can also create gaps in your insurance that many people don't find out about until they file a claim.
Here's what to know, and what to ask.
Why your homeowners policy may not be enough
A homeowners policy is designed to protect your home and your personal life. Business activity is a different kind of risk, and many home policies treat it that way. Depending on your policy and insurance company, you may find:
- Limited coverage for business property. Many policies cap coverage for business equipment, inventory, and supplies kept at home at a relatively low amount, and may limit it further for business property away from home.
- Little or no business liability coverage. If a client trips on your front steps on the way to a meeting, or a product you sell causes a problem, your homeowners liability coverage may exclude claims that come from business activities.
- No coverage for lost business income. If a covered loss forces you to stop working for a while, a homeowners policy generally doesn't replace your business income.
- Questions about business use of the home. Some insurance companies want to know about business activity at the home and how much of it there is.
The details vary a lot from policy to policy. That's why it's worth reviewing yours with an agent instead of guessing.
Common situations to think about
Ask yourself whether any of these apply:
- Clients, customers, or employees come to your home
- You store inventory, equipment, or tools at home
- You make or sell products, including food or handmade goods
- You give professional advice or services
- You use your personal vehicle for business errands or deliveries
- You store client information on your laptop or phone
Each one can point to a different kind of coverage need.
Coverage options to ask about
Depending on your business, the right fit could include one or more of these. Availability and eligibility depend on the insurance company, your business type, and your situation.
A home business endorsement. For some small, low-risk businesses, an endorsement added to your homeowners policy can increase coverage for business property and may add limited business liability.
A business owner's policy (BOP). For many small businesses, a BOP packages general liability with business property coverage and often business income coverage. It can be a good fit when you have more equipment or inventory, or when clients visit.
General liability. Helps protect your business if it's held responsible for injuring someone or damaging their property.
Professional liability (errors and omissions). If you give advice or provide a professional service, this can help if a client claims a mistake cost them money.
Commercial auto. If you use a vehicle for business, your personal auto policy may limit or exclude some business use. Let us know how you use your vehicle so we can check.
Cyber coverage. If you store client information, ask whether cyber coverage makes sense for you.
What we'll ask you
To find the right fit, we'll usually ask:
- What does your business do, and how long have you been in business?
- Do clients or employees come to your home?
- What equipment, inventory, or supplies do you keep there, and roughly what are they worth?
- About how much revenue does the business bring in?
- Do you use a vehicle for business?
- Do any clients or contracts require you to carry specific coverage or provide a certificate of insurance?
You don't need perfect answers. Ballpark numbers are a fine place to start.
Let's make sure you're covered
At Shadow Lake Insurance, we're an independent agency on Six Forks Road in Raleigh. We work with several insurance companies, so we can look at your home policy and your business together, explain where the gaps are, and compare options.
Running a business from home? Call or text 276-597-9844 or visit shadowlakeinsurance.com.
Coverage subject to policy terms and underwriting. This article is general information, not a description of any specific policy.