Today’s technology makes starting a business from home easier than ever.  With all of the resources you need accessible on line, many business owners find the flexibility and comfort that comes with working at home very appealing.  So it is no surprise that according to the Small Business & Entrepreneurship Council, 51.6% of all small businesses were operated primarily from someone’s home.  One of the common myths circulating among these businesses owners is that a homeowner’s insurance policy also protects their home-based business.  But this is just that, a myth.   Read on to get the facts when it comes to insurance and your home-based business.

First of all, standard homeowner’s insurance does not cover a home-based business.  Period.  Some business owners will pay an additional premium to add an endorsement for the business onto their homeowner’s policy.  An endorsement simply extends, or restricts, the reach of the policy coverage.  In this case it extends coverage from their homeowner’s policy  to their business. While better than nothing, endorsements are very limited and don’t cover everything a business needs.

Most insurance companies don’t offer any home-based business endorsement options at all, but of those that do the endorsements are restricted.  For example, many endorsements are only available to specific types of businesses such as dog kennels or hair salons.  In addition, they only offer general liability coverage, not professional coverage.  This means that while the business/home owner may be covered for a client that slips and falls at their home, they will not cover the owner for things that are a result of their professional conduct, such as a lawsuit.

Some home-based business owners think that if they get an umbrella policy with their homeowner’s insurance that will protect their business.  This is simply not the case.  An umbrella policy increases the amount the insurance company will pay out on a claim, usually up to $1 million dollars.  But it does not alter what is covered by the original policy.  For example, if an owner loses their roof in a storm which will cost $25,000 to replace but their homeowner’s policy will only pay $15,000, the umbrella policy would pay the additional $10,000 to fix the roof.  However, if the owner’s office equipment was ruined from a leak in the rood caused by that same storm, neither the homeowner’s policy nor the umbrella policy would pay on the claim.

When it comes to protecting a home-based business, the best thing an owner can do is purchase a commercial insurance policy.  A commercial policy will cover both general liability claims, such as business equipment in the home, as well as professional claims, such as lawsuits.  BR-Cevaal can help you find the right policy that meets all of your personal and professional needs.  Contact us today and let us help you, and your business, stay protected.