Choosing an insurance option that is right for your home-based business

Posted On Monday January 13, 2020

Do you grow your own produce, make and sell your own products, or offer a service like hairdressing or bookkeeping? Operating a business from your home can be an attractive option. It offers more flexibility and can help keep business expenses down.

As a business owner, you know how important it is to safeguard your business for the future. All businesses whether big or small face many types of risks and a home-based business is no exception. Insurance will not reduce those risks but you can use it as a financial tool to help protect against losses associated with some risks.

While some risks are not insurable such as wear and tear, other risks such as fire, theft or certain liability exposures can be covered with a number of available insurance products. At Middlesex Mutual Insurance, we offer a range of insurance options to protect your home-based business.

Liability is typically the greatest risk to a home-based business.

A business operating out of your home creates more exposure. Exposures like:

  • more people coming onto your property,
  • customers using the products you are selling, or
  • Accessing the services, you are offering.

The chance of lawsuits increase and personal liability on your home insurance policy does not cover such situations.

Your home insurance policy will not provide adequate coverage for the insurable risks your business may encounter. While it provides some limited coverage for books, and tools necessary for a business or profession there are restrictions and exclusions for businesses operating in the home. So, a home-based business policy is an important consideration.

Advising your insurance agent of any changes to your circumstances is an important first step to ensuring you have adequate coverage in place. Unfortunately, if your insurance provider is not aware of your new situation, they could choose to cancel your policy not only leaving you without any home coverage but also making it more difficult to secure business insurance.

What does a home-based business policy cover that your home policy does not?

The following scenarios offer examples and do not reflect the full extent of available coverage:

  • Damage to or stolen business inventory and equipment
  • Business interruption coverage if your business is closed due to an insured risk
  • Customer lawsuits:
    • The product you sold and/or installed causes damage or injury (product & completed operations liability)
    • a visitor to your home slips and falls on the way up to your door (premises liability)
    • as a professional, the advice you offered causes injury or damage (professional liability)

At Middlesex Mutual Insurance, we offer comprehensive home-based business insurance coverage to meet your growing insurance needs. Our packages include the following coverage:

  • business content, stock/inventory (to specified limit)
  • business interruption
  • crime
  • commercial liability

Middlesex Mutual Insurance has been insuring Middlesex County and surrounding areas for over 140 years. As a local insurer, we are proud to know and protect the communities we insure. Please call a Middlesex Mutual agent today. They will be happy to answer your questions and help you get the coverage that is right for your insurance business needs.