home based business owner

Does Home Insurance Cover a Home Based Business?

Micro-enterprises with 1-4 employees make up 54.1% of all private employers in Canada. Most of them are home-based businesses.

If your business is based at your home, you might assume a homeowner's insurance policy is enough to cover it. This can leave you in a legal or financial bind if property damage or injuries occur.

Read on to learn whether or not home insurance can cover your home-based business and where to get the right policy.


What Does Homeowner's Insurance Cover?

Homeowner's insurance helps homeowners cover the cost of protecting their homes and belongings. It applies to any buildings on your property.

Most mortgage lenders require homeowner's insurance. There are also several other reasons you may need it. Many of the best homeowners insurance policies will cover:

  • Unexpected events like fires, theft, and natural disasters
  • Repairs and replacements of damaged property
  • Temporary living expenses
  • Liability for injuries on your property
  • Damages to property you don't own

This coverage protects you from financial hardship. It also protects the investment you and your mortgage lender have made in your home.

What Insurance Do I Need For My Home-Based Business?

Despite its many benefits, home insurance doesn't always provide enough coverage for a home-based business. For example, it only provides an average of $2,500 of coverage for business equipment.

You may need to find a separate business home insurance policy. Your options include a homeowner's policy or liability endorsement, in-home business policy or program, or business owner's policy.

Homeowner's policy

A homeowner's policy endorsement is added to your existing homeowner's policy. For extra premiums, you can increase your standard policy's coverage and protects business equipment like computers.

Liability endorsement

Liability endorsements focus on protecting against any injuries that occur on your property. You won't have to pay for any legal fees or medical bills that result. It's available for businesses with few daily visitors.

In-home business policy or program

An in-home business policy or program combines business equipment and liability coverage. It may also reimburse you for lost papers, records, accounts, and off-site business property.

The policy may even include business interruption coverage. This helps recover lost income and pay for you to operate out of a new location temporarily.

Business owner's policy

A business owner's policy is created for small-to-mid-size businesses. It provides a larger-scale version of the in-home business policy or program. It's best for home-based businesses with multiple locations.

This policy may require you to seek out extra forms of coverage. It doesn't provide worker's compensation, health, or disability for your employees. You may also need to add liability and lost income coverage.

Finding the right home business insurance is a process of considering what policy can meet your needs at a fair price.

Where Can I Get Insurance For My Home-Based Business?

Canada is a country full of home-based businesses with valuable equipment that must be protected.

A typical homeowner's policy often isn't enough to replace or repair all forms of damage. It also may not provide enough liability coverage to protect against the cost of injuries.

Business owners have several options, including homeowner's policy or liability endorsements, an in-home business policy or program, and a business owners policy.

Finding the right insurance for your business is the best way to protect it from any eventuality. Get a free quote from the expert insurance brokers at Hillis Insurance Agencies in Winnipeg and discuss your home-based business insurance needs.