Question
Does my home insurance cover my home-based business?
Short answer
Barely. A home or renters policy usually covers business equipment only up to a small amount, often $2,500, and excludes liability for business activities. Most home businesses need an add-on or a small business policy.
What the home policy leaves out
- Equipment and inventory: business property is capped low, and property away from home even lower.
- Liability: a client who trips on your steps during a business visit, or a product you sold that hurts someone, is usually excluded.
- Lost income: if a fire stops you working, the home policy doesn't replace business income.
The usual fixes
- A home business endorsement on your home policy: cheap, and enough for a small, low-risk business with few client visits.
- A business owner's policy: bundles business property, general liability and lost income. The common choice once you have stock, equipment or clients coming over.
- Professional liability if clients could blame your advice or work for a loss.
Tell your home insurer about the business either way. Hiding it can complicate a claim.
This is general information about how US policies usually work. Your own policy's wording and your state's rules decide the details.