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Insurance for Home-Based Businesses: Does My Homeowners Policy Provide Coverage?

insurance for home based businessesIf you run a business out of your home, it’s crucial to understand how to properly protect your operations. Although every insurance company and policy form is unique, you will typically find an exclusion for business activities within your homeowners insurance policy. For this reason, it’s extremely important to obtain the appropriate liability insurance coverage.

This applies regardless of where the business is actually conducted. As an example, a participant in a Zumba class, which happened to take place at a fitness club, suffered a stroke during the class. The instructor filed a claim with her homeowner policy and the claim ended up being denied.

The case ended up going to an appellate court in Arizona, which is where the incident occurred, and the jury found that the instructor’s activity at the club constituted “a trade, profession or occupation,” even though she was teaching on a very limited basis. This in turn affirmed the exclusion in the instructor’s homeowner policy that pertains to business activities.

As a general rule of thumb, if you’re engaged in a business where you earn more than $2,000 per year, you should consider obtaining a commercial general liability policy or a business owners policy, which will provide property coverage for your business property in addition to covering your business liability exposure. It’s important to discuss in detail the nature of your business with your local independent insurance agent to ensure that you obtain the proper coverage.

Keep in mind that property coverage provided by your homeowner policy could also be in jeopardy if you are operating a business out of your home, which includes selling products like Mary Kay, and LuLa Roe. Some homeowners policies contain specific “other structures” exclusions pertaining to business operations, so if you’re conducting a business activity out of a detached garage, shed, or barn, you may find yourself with no coverage for that property if that “other structure” is damaged or destroyed.

With coverage varying from one insurance company to the next, it’s best to speak with your local independent insurance agent to learn more about how you can properly protect any property and/or liability exposures associated with a business you operate. Earning a little extra money on the side is great, as long as you have the right insurance coverage to protect you in case something goes wrong.

Our experienced agents at Eaton & Berube Insurance in Nashua, NH, are here to help you better understand your exposures and make coverage recommendations designed to best protect you. If you have questions regarding insurance for home-based businesses, or would like to get a quick, free insurance quote, give us a call today at 603-882-2766 or submit our online quote request form.

Post authored by Marc McNulty. Originally published May 19, 2017. View original post at:

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