Home-Based Businesses: Are You Properly Insured?

In 2013, Forbes reported that 52% of small businesses were home-based. In March 2016, the United States Census released the 2012 Survey of Business Owners, which showed that there are over 27.5 million home-based businesses being run throughout the country, a nearly 500,000 increase from the 2007 report.

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 exposures) but the actual nature of your business may dictate otherwise so be sure to discuss with your local independent insurance agent (us!).

The exclusion for business activities is something you will find in all homeowners policies, so it’s very important for anyone who operates a home-based business – no matter where the business is actually conducted – to obtain the appropriate liability insurance 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 (this includes selling Mary Kay, Lularoe, etc.). For example, homeowner 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 might find yourself with no insurance coverage if that “other structure” is damaged or destroyed.

When in doubt, speak with us to learn more about how you can properly protect any property and/or liability exposure associated with a business you operate. Contact our office at (309) 266-7300 and ask for our small business executive to discuss your home-based business today!  Because earning a little money on the side is great… until you realize you have no insurance coverage for it.



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