With the use of the internet and email many people are able to realize the dream of starting a business from the comfort of their own home. This now poses the question, is there coverage under the typical homeowner’s policy for this new business exposure?
The typical, unendorsed homeowner’s policy provides little to no coverage for business activities. Depending on the type of business, some in home business exposures can be endorsed onto a homeowner’s policy for an additional premium. Some examples of an eligible business would be an office or other administrative service. In home day care may be eligible on a limited basis.
Types of businesses that would be ineligible include manufacturing, sale or distribution of food products and auto mechanic. Other businesses may be ineligible based upon company underwriting guidelines.
Running an in home business without endorsing the homeowner’s policy can result in some exclusions of coverage. There would be limited coverage for any equipment used for the business. There would not be any coverage for business interruption and the liability for claims that could arise out of a business activity.
If the in home business is not eligible to be included under the homeowner’s policy, a commercial insurance policy should be purchased. Other exposures to consider when analyzing the need to insure your in home business would be workers compensation in the event that you have to hire an employee, professional liability in the event you operate an accounting service or a consulting firm and property of others that you might have in your possession.
As always you should speak to an insurance professional to determine your need for coverage and the appropriate policies available.