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Home-Based Business Insurance, Explained

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Quotes available through: Simply Business
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  • It’s important to note that most home insurance policies won’t cover businesses run from your home, therefore a business insurance policy for home-based businesses is highly recommended.
  • There are several types of business coverage that are ideal for protecting entrepreneurs working out of their homes including: BPP, Workers Comp, & Inland Marine insurance.
  • Business Personal Property is one of the highly recommended types of plans for home businesses as it will cover all of your equipment and physical assets which are usually excluded as part of home insurance policies when you operate a business from home.
  • If you work alone, you may also want to consider a worker’s comp plan for sole proprietors as this will ensure you are covered in case of illness or injuries. Workers’ comp is especially important if you have any employees.
  • If you travel to road shows, or send merchandise, you may also want to consider an inland marine insurance plan that can cover your physical property when it’s away from home.
  • To cut through the red tape, we recommend using an online quote tool to get matched with the correct type of insurance policy for your business.

Home-based business insurance is specifically designed for entrepreneurs running their businesses out of their homes and provides them with the protection they need to operate safely and securely. Starting a home-based business can be an exciting and rewarding experience, but it comes with risks. To protect your business from potential losses due to unforeseen circumstances, you must have the right insurance coverage in place.

Our top picks for home-based business insurance

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RLI Insurance

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AMB Financial Strength
A+ Superior)
Specialized for:
General Liability / Business Personal Property

Why We Like It

RLI Insurance specializes in offering affordable General Liability coverage for home-based businesses. RLI is available nationwide in all 50 states as well as in Washington DC. Through RLI, your home business can get General Liability coverage regardless of whether the business functions take place at home, or on the road. This makes it optimal even for companies that run events or visit industry trade shows away from their main home office. As an added benefit, you have the option of bundling a customizable Business Personal Property insurance plan with your General Liability plan to ensure all of your coverage needs are met. More on that below.

Coverage Highlights

With General Liability through RLI, you can gain access to:

  • $1 million occurrence limit & $2 million aggregate limit

Other coverage highlights include:

  • $50k in coverage for damage to rented premises;
  • $5k in coverage for medical payments;
  • Waiver of Subrogation (optional)
  • Blanket Additional Insured endorsements (optional)
  • Business Personal Property (optional add-on)

Business Personal Property add-on:

  • Business Personal Property coverage is available as an add-on to your RLI general liability policy
  • Coverage is available in increments of $5k up to a total coverage of $100k

Garagekeepers Legal Liability add-on: *Available only to Car Detailing businesses as an add-on to your RLI general liability policy *Limits of $30k or $60k

Hiscox Insurance

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AMB Financial Strength
A (Excellent)
Specialized for:
General Liability, Professional Liability, Business Personal Property

Why We Like It

Hiscox is one of the largest insurance providers in the US and operates in all 50 states. It offers serval types of coverage options to suit your needs including:

  • General liability insurance
  • Professional liability insurance
  • Business personal property insurance (add-on)

Hiscox specializes in insurance for small and micro-businesses and its robust coverage options are available for tons of business types & trades. Hiscox also has over 120 years of experience behind its name as part of the original Lloyds group from 1901. This long track record speaks volumes for how trustworthy Hiscox is.

Coverage Highlights

General Liability Coverage through Hiscox offers your choice of access to:

  • $1 million occurrence limit & $2 million aggregate limit
  • $2 million occurrence limit & $3 million aggregate limit

Other coverage highlights for General Liability include:

  • $100k in coverage for damage to rented premises
  • $5k in coverage for medical payments
  • Blanket Additional Insured endorsement (automatically included)
  • Waiver of Subrogation endorsement (optional)

Professional Liability Coverage through Hiscox offers your choice of access to:

  • $1 million occurrence limit & $1 million aggregate limit
  • $2 million occurrence limit & $2 million aggregate limit
  • $3 million occurrence limit & $3 million aggregate limit

Business Personal Property add-on:

  • Business Personal Property coverage is available as an add-on to your Hiscox General Liability policy
  • Choice of coverage limits: $5k, $10k, $15k, $20k, or $25k

Harborway Insurance

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AMB Financial Strength
A+ Superior)
Specialized for:
General Liability, Inland Marine

Why We Like It

Harborway is a lesser-known provider that offers specialized coverage for:

  • General liability insurance
  • Business personal property insurance
  • Inland marine insurance

This provider offers great coverage for equipment and items you transport or store off-premises makng is great for companies that send employees to work off-site or occaisionally do field work.

While Harborway isn’t an AM Best rated company, it is reinsured by Munich Re which has an AM Best financial strength rating of A+.

Coverage Highlights

General Liability Coverage through Harborway offers access to:

  • $1 million occurrence limit & $2 million aggregate limit

Other coverage highlights for General Liability include:

  • $100k in coverage for damage to rented premises;
  • $5k in coverage for medical payments;
  • Waiver of Subrogation (optional)
  • Blanket Additional Insured endorsement (automatically included)
  • Contractors’ Errors & Omissions endorsements (optional)

Business Personal Property Coverage through Harborway offers access to: *Property limits of $5k, $10k, $15k, $20k, $25k, and $50k *Blanket Additional Insured endorsement (automatically included)

Inland Marine Coverage through Harborway offers access to:

  • $5k or $10k coverage limits on inland marine property
  • Blanket Additional Insured endorsement (automatically included)

Accredited Insurance

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AMB Financial Strength
A- (Excellent)
Specialized for:
General Liability

Why We Like It

Accredited Insurance is backed by the massively-known Travelers Insurance with whom it co-built a General Liability policy tailored specifically for small businesses.

Accredited offers insurance in all 50 states as well as Washington DC and has been in business for over 50 years. The company has proven itself for its high-quality service, stability, and integrity.

Accredited also has a strong financial strength rating of A- from AM Best. This means you can rest easy knowing that you will be supported by a strong company should anything go wrong.

Coverage Highlights

Contractors opting for General Liability through Accredited gain access to:

  • $1M Occurrence limit & $2M Aggregate limit

Non-contractors have the option of plans ranging from:

  • $100k occurrence limit & $300k Aggregate limit
  • $1 million occurrence limit & $2 million aggregate limit

Other coverage highlights include:

  • $100k in coverage for damage to rented premises
  • $5k in coverage for medical payments;
  • Waiver of Subrogation (optional)
  • Blanket Additional Insured endorsements (optional)

Travelers Insurance

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AMB Financial Strength
A++ (Superior)
Specialized for:
Professional Liability

Why We Like It

Travelers is one of the largest insurance providers in the US and offers nationwide business insurance coverage.

Travelers can offer many different types of coverage for businesses of all sizes but is specifically well suited for Professional Liability plans for companies in the fields of:

  • Accounting
  • Bookkeeping
  • Tax Preparation

Travelers is a great choice for professional liability backing thanks to the brand’s nationwide coverage, 160 years of expertise, and top financial rating of A++ from AM Best.

Coverage Highlights

Professional Liability Coverage through Travelers offers access to:

  • $1 million occurrence limit & $1 million aggregate limit

Optional add-ons include:

  • Defense Outside Limits coverage

Cerity

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AMB Financial Strength
A- (Excellent)
Specialized for:
Workers’ Compensation

Why We Like It

Cerity offers affordable workers’ compensation policies and can cover various types of businesses and industries. As a major insurance provider in the US, Cerity is known for its:

  • Low prices
  • Simple policies
  • Same-day coverage

When you sign up for a workers’ comp policy through Cerifty, you get same-day coverage and proof of insurance. This means you can get your business started faster with very little lag time.

Cerity is a well-known provider in the insurance industry and has an AM Best financial strength rating of A- (Excellent), as well as 4.4 stars on Trustpilot. Cerity is offered nationwide in all states except Ohio, North Dakota, Washington, and Wyoming (where private worker’s comp is not legally sold).

Coverage Highlights

Workers’ comp coverage through Cerity offers access to:

  • Bodily Injury by Accident at $1M per accident
  • Bodily Injury by Disease at $1M per each employee, subject to a $1M policy limit

Other coverage highlights for workers’ comp from Cerity include:

  • Statutory Workers’ Compensation coverage
  • Customers have the option to include or exclude the owner in coverage when permitted under state law

biBERK Business Insurance

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AMB Financial Strength
A++ (Superior)
Specialized for:
Workers’ Compensation

Why We Like It

biBerk is a subsidiary of the famous Berkshire Hathaway Insurance Group. As part of Berkshire Hathaway, biBerk is automatically backed by an A++ AM Best financial rating and over 75 years of experience in the insurance industry. This ensures you will get reputable service and solid coverage you can rely on.

The provider specializes in Workers’ Compensation coverage for small businesses across all US states except OH, ND, WA, and WY.

A major highlight of biBerk is that workers’ comp is available to sole proprietors and multi-employee businesses.

Coverage Highlights

Workers’ Comp coverage through biBerk includes Employers’ liability limits for:

  • Total policy limit of $500k
  • Bodily Injury by Accident at $100k/accident limit
  • Bodily Injury by Disease at $100k/employee limit
  • Coverage for the owner (optional depending on state law)

Other plan highlights:

  • biBerk’s Workers’ Comp plans offer statutory Workers’ Compensation coverage. This means that the employee is not required to prove that their employer is at fault to receive compensation.

USG Insurance Services, Inc.

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AMB Financial Strength
A- (Excellent)
Specialized for:
Cyber Liability

Why We Like It

With the growing need for cyber security coverage, look no further than USG Insurance Services, Inc.

USG offers top-notch Cyber Liability insurance to protect small and micro-businesses from cyber-attacks and data breaches originating from outside your company.

Plans are available for a broad range of business types and come backed by North American Data Security as well as a solid AM Best financial rating of A-. USG operates 20+ branches across the country, meaning you’re sure to have a regional or local office nearby to support you with queries and account management help when needed.

Coverage Highlights

Cyber Liability Coverage through USG offers access to:

  • $250k occurrence limit & $250k aggregate limit

Other coverage highlights for Cyber Liability include:

  • $1k deductible
  • $250/year flat rate of coverage
Working out of your home? Keep your business protected with an insurance policy. Suitcase and Shield With Checkmark GET A QUOTE

What is home-based business insurance?

Home-based business insurance is usually a package of business insurance policies designed to protect you and the business you run out of your home.

It can cover the financial losses in case someone files a claim against your business.

This type of insurance can help cover the costs of problems similar to the following:

Without home-based business insurance, you could be personally responsible for covering these costs yourself.

Since home-based insurance isn’t a specific type of coverage, you’ll likely need to combine several types of insurance to cover all the risks. Common policies include general liability insurance, which protects you from claims related to customer injury or property damage, and business property coverage, which covers losses or damages to your workspace and equipment.

Ultimately, the type of home-based business insurance that you need depends on the type of business you run and the risks you face. We’ll explain the different types of insurance and the risks they cover later on so you can decide what is necessary for your business.

Homeowner’s insurance vs. business insurance

Homeowners insurance and business insurance are two very different types of plans. Homeowners insurance generally offers coverage for a single-family home, such as liability protection and damage to the homeowners’ personal property and possessions. In contrast, business insurance protects business assets, employees, and owners.

Both homeowners and business insurance policies offer coverage for items that may get lost or damaged in a fire or natural disaster, and coverage may include similar language in their respective policy forms.

In some cases, an endorsement on your homeowners insurance can provide additional coverage for your home-based business. Endorsements can come in various forms, ranging from comprehensive coverage against property damage due to fires or other disasters to more personal liability protection, such as a customer getting injured while visiting your home.

For businesses with potential liabilities that exceed minimal levels, these endorsements to homeowner policies may not be sufficient, and special home-based business insurance is necessary.

Types of home-based business insurance coverage

You can find the most common types of home-based business insurance and what they include below.

The coverage you should get for your business depends on several factors, such as the size of your business and its risks.

Advertiser Disclosure
Protects your home-based business from claims of bodily injury, property damage, and personal/advertising injury.
Examples of coverage:
  • Customer injuries/property damage
  • Advertising injuries/libel
Protects businesses against claims of negligence, as well as lawsuits resulting from errors or omissions of information.
Examples of coverage:
  • Failure to deliver services promised
  • Errors or oversights made on your part
Covers you and your employees from financial losses & liability if they become injured or ill due to work-related causes.
Examples of coverage:
  • Medical expenses if you or your employees get injured while working
  • Lost wages from being unable to work
Covers physical assets like goods and equipment when in transit over land or temporarily stored at off-site locations.
Examples of coverage:
  • Replacement of inventory lost in transit
  • Repair of property damaged in transit
Covers damage, loss, and theft of physical assets at a business’ primary location. It covers items like inventory, furniture, and equipment, but does not cover the building.
Examples of coverage:
  • Replacement of stolen goods
  • Repair of damaged goods
Protects companies’ data & intellectual property from cyber-related risks such as financial losses caused by cyber-attacks, external data breaches, etc.
Examples of coverage:
  • Data recovery costs
  • Legal fees

Commercial general liability

Commercial general liability (CGL) protects your business from claims of bodily injury, property damage, and personal injury that arise from your business operations, products, or services.

If a client gets injured on your property and sues you, this insurance can cover the medical expenses and legal fees. On the other hand, this type of policy typically won’t cover the costs associated with injuries to you or your employees.

Business property insurance

Business property insurance covers the cost of repairing or replacing the physical assets and property that your business owns or leases, such as equipment, furniture, inventory, and supplies. It helps protect your business from financial loss if these assets are damaged or lost due to unexpected threats, such as fire, theft, vandalism, and natural disasters. For example, if someone breaks into your home and steals your work computer, business property insurance will cover replacing it.

Professional liability insurance

Professional liability insurance, or errors and omissions insurance, protects your business against negligence and misrepresentation claims. It covers the costs of legal fees and settlements if a client claims negligence, errors, or mistakes in your professional services. This type of policy is essential if you provide professional advice or consultative services.

Workers’ compensation

This type of policy covers employee medical costs and lost wages due to a work-related injury or illness. All states but Texas require you to have workers’ comp if your business has one or more employees. Even if you don’t have employees, you can still purchase this type of insurance to protect yourself if you get injured on the job.

Cyber Liability Insurance

Cyber liability insurance protects businesses from online threats, such as data breaches, viruses and malware. It can cover the costs associated with notifying customers of a breach, restoring lost data, or revamping security measures — all important considerations when running a home-based business.

Commercial auto insurance

This type of policy covers the costs associated with third-party bodily injury or property damage arising from an automobile accident.

These claims may not be covered by a personal auto policy if you’re using a vehicle for business purposes. Therefore, if you regularly use your vehicle for business purposes, such as making deliveries or transporting clients, you need a commercial auto liability policy to protect yourself from personal and financial loss.

What is covered by home business insurance?

Home business insurance can protect against many financial risks that come with running a business from your home.

A comprehensive home business insurance package will typically provide coverage for the following:

The specific risks covered by your home business insurance will depend on the types of coverage you purchase. To have absolute coverage, you need to get various types of insurance. If you’re unsure what type of coverage you need, an insurance professional can help you understand your options and requirements.

(855) 843-2963

Call and speak to an insurance professional for free!

What is not covered by home-based business insurance?

Home business insurance will typically not cover any damage to personal property that isn’t used exclusively or primarily for business purposes. For losses related to personal property, you would need to turn to personal insurance, such as homeowners insurance or personal auto coverage.

Home-based business insurance may not cover employees nor property that is used or transported off-site. In this case, you would need special coverage like workers’ comp and inland marine insurance.

What home business insurance does and does not cover ultimately depends on the types of policies you purchase. This is why it’s important to consider all the potential risks your home business faces so you can purchase the necessary types of coverage.

How much does home business insurance cost?

Most insurance companies offer basic policies starting at $200 to $500 per year.

However, if your business poses a risk to the public or has expensive assets or multiple employees to protect, you may find higher rates averaging around $1,200 to $2,500 annually.

The cost of home-based business insurance can vary significantly depending on the type of business you have and your individual coverage needs. For example, a freelance writer would likely pay less than a home-based daycare service.

The following factors impact how much you will pay for home business insurance:

Ultimately, selecting appropriate coverage for your business is essential for protecting it from potential risks, so get quotes from different providers to access the most competitive premium.

Types of home-based businesses that may need insurance

Proper insurance is vital for running any company, including a home-based business.

That said, each type of home-based business requires different policies to cover all their needs.

For example, contractors often carry business insurance to protect their tools and materials. Likewise, handypersons can get coverage for property repairs due to damage or natural disaster.

Photographers need less protection than some in riskier industries. However, coverage can still protect against the costs of liability and damage caused while using expensive camera equipment.

Home-based businesses that specialize in online transactions may also require e-commerce insurance.

On the other hand, home-based estheticians and salon owners likely need to carry policies that cover liability stemming from treatments, as well as coverage to protect the clients’ valuable belongings and on-site beauty products. An e-commerce business should consider insurance to cover inventory storage.

Tips for buying home-based business insurance

Because many types of home-based business insurance are available to suit different needs, it’s important to understand which coverage is right for you and how much it may cost.

Follow these tips to make an informed decision when buying your home-based business insurance:

(855) 843-2963

Speak to an insurance agent and get the help you need.

Do I need home-based business insurance?

If you operate a business from within your home, you may need to get home-based insurance because neither homeowners’ nor renters’ insurance will protect it in most cases.

Whether or not you need home-based insurance depends on various factors, such as the type of business, number of employees, and risks involved.

Consider these questions when evaluating if you should get home-based business insurance:

What is a home business insurance endorsement?

If you have a small business, you can often add an endorsement to your homeowners’ insurance policy to get extra coverage without taking out a stand-alone business insurance policy.

These endorsements can be an excellent way for small home-based business owners to add a small amount of coverage for minimal cost. Such benefits include increased liability protection or additional living expense coverage if the business forces you to leave your home due to covered damages.

While this optional coverage may be suitable for covering small operations, you will probably need to take out business insurance if you have a larger business or need specialized coverage.

Protect your home-based business with an insurance policy Suitcase and Shield With Checkmark GET A QUOTE

FAQ: Home-based business insurance

Is business insurance required for home-based businesses?

Business insurance is not legally required for most home-based businesses, but it is highly recommended. Having business insurance can help protect your home, assets and business from potential risks associated with running a business out of your home. By having the right coverage for your specific industry, you can be confident that your operations are protected should anything unexpected happen.

What is covered by a home business insurance endorsement?

A home business insurance endorsement is an additional coverage added to a homeowners insurance policy that is specifically designed for small business owners running operations from home. It typically provides greater liability protection, as well as coverages for property damage and issues related to the business’s operations, such as inventory, computers and customer harm due to faulty products or services.

This type of endorsement helps provide more comprehensive coverage than a standard homeowners policy and can offer additional protection in certain cases.

Is business liability included in home insurance?

Business liability can be added to your home insurance as an endorsement to provide additional coverage against legal claims arising from business operations being conducted from your home. If you run your business out of your home, this type of coverage protects you against claims related to property damage or customer injury.

What type of insurance is best for a small business at home?

At a minimum, you should consider getting general liability insurance if you run a small home-based business. This coverage helps protect your business against common claims, such as bodily injury or property damage, from third parties. If a client or customer accidentally falls on your property, your general liability policy can cover the medical and legal expenses.

Kiah Treece
Kiah Treece Business Finance

Kiah Treece is a business finance expert with more than five years of editorial experience. Through her experience as?a small business owner, real estate investor, and lawyer, she’s knowledgeable in the areas of banking, loans, financing, and insurance for small businesses. Her first-hand experience has enabled her to?break down complex?financial topics to help?consumers make informed decisions so they can spend their money wisely.

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