The ever-evolving sophistication of business technology and cloud networking solutions, along with the changing demands of an empowered workforce, has vastly improved the viability of home-based businesses. In 2017, there were more than 38 million home businesses in the U.S., with combined revenue of $427 billion per year. We’re not talking about lemonade stands here.
Of course, with big business comes big complexity, especially when it comes to insurance. The rapid growth in home-based businesses has led to confusion over just how these businesses should be insured, and for how much. Many home-based business owners believe they can rely on their homeowners’ insurance policy to protect business assets in cases of loss or peril. After all, the business property is in the home, right?
But this common misconception can lead to owners sustaining considerable financial loss – sometimes losing their entire business – because of one unexpected event. So here’s the truth: if you operate a home-based business, you almost certainly need commercial property insurance to keep your assets protected, and in many cases, you may need additional forms of coverage as well.
Commercial Property Insurance for Home-Based Businesses
Commercial property insurance covers business assets in two ways that most homeowners insurance policies do not. First, they have higher limits or limits adjustable to the business. Even small home businesses will quickly exceed the value limits of a home policy. Those phone systems, laser printers, laptops and smartphones add up fast. Second, they can transfer coverage outside the home. If you take your laptop to client meetings offsite, your home policy coverage of that laptop ends the moment you walk out the door. From there, you’ll need commercial property coverage to keep it safe.
Take stock of your business property that is designated exclusively for business use. If the value of those assets amounts to more than $10,000, you need to speak with a reputable agent about a commercial property insurance policy for your home business.
Other Insurance Coverage Options for Home-Based Businesses
We single out commercial property insurance because this is the one form of coverage that home-based businesses owners most often forgo by believing their home policy is sufficient. However, it is not the only form of commercial insurance coverage that home business owners may need. Here are other common forms of coverage you should consider if you are operating or thinking about operating a company out of your home:
- Commercial General Liability – If you have people who visit your home as a business function, whether customers or vendors.
- Workers’ Compensation – If you have employees working in your home.
- Professional Liability – If you provide a specialized service subject to claims of negligence. Such as Errors and Omissions insurance.
- Commercial Vehicle – If you operate one or more company vehicles.
And there are several more types as well that a reputable commercial insurance agent will be happy to discuss in depth. Multiple types of commercial insurance can be bundled into a single policy called a Business Owners’ Policy (BOP). Combining coverage types into a BOP can often lower premiums compared to buying separate policies, however, there may be limitations and risks as well. As always, work with a reputable agent and read the fine print.
If you are operating a home-based business in Texas or anywhere nationwide, make sure you have the right coverage at the right price. The first step is speaking to the experts at Arthur Blake Insurance, a full-service, client-focused insurance brokerage with almost 20 years experience negotiating superior policies for our clients.
Let’s chat today: 972-954-6383.