Does Your Home Policy Cover Your Home Business?

What you need to know about insuring your home-based business.

If you are just launching your business, then you may enjoy the convenience of working out of your own home.  However, before you settle in and start building a name for your company, you need to secure the right insurance protection.  While you may assume that your homeowners insurance policy offers adequate coverage, you may be mistaken.  Here’s what you need to know about insuring your home-based business.

Standard Home Policies Offer Limited Coverage

If you run a business out of your home, then your existing homeowners insurance policy probably isn’t offering the coverage that your company needs.  In fact, most home insurance policies exclude coverage for the following:

  • Data loss
  • Business equipment
  • Business records
  • Loss of income
  • Employee or customer injury

This is why, if you are operating a home business, you need to secure specialty forms of coverage.  Some of your options include the following:

  • Business Endorsement– If your business operation is still small, then you can add a business insurance endorsement to your homeowners insurance policy. This type of coverage is best suited for businesses that do not have a ton of inventory or equipment.  Please note that this form of coverage does not offer protection against liability issues.  So, if your business needs liability coverage, then you are advised to secure a different insurance option.
  • Home Business Policies– For medium-sized home businesses (with assets ranging from $2,500-$10,000), home business insurance policies are a good coverage option. These specialty policies are specifically designed with the needs of home-based business owners in mind.  In Texas, these policies typically provide liability, property, loss of income, and directors and officers liability coverage.
  • Commercial Insurance Policies– If you are operating a major business out of your home, then your coverage needs are beyond what endorsements and home business policies can offer. The best way to secure the comprehensive property and liability coverage that your company needs is with standard business insurance options.  While commercial coverage options are more expensive, they offer higher coverage limits and specialty forms of protection.

This is what you need to know about insuring your home-based business in the state of Texas.  Do you have additional questions about your home coverage?  If so, then contact the experts at Mike Leonard Insurance Agency.  Our dedicated team is eager to find you the right coverage from one of our many carriers, including: Kemper, MetLife, Nationwide, Travelers, Safeco Insurance, Progressive, and American Strategic Insurance.