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Business Insurance: Home-Based Business

How do I separate my home insurance needs from my business insurance needs?

  • It is important to separate the property and liability issues of each. You may have used personal dollars to purchase business furniture and equipment, but it is still considered business property.

Does my Homeowners policy cover my business?

  • There is very limited coverage for business personal property. Some policies are as low as $500.
  • Liability can be extended by a premium-bearing endorsement, but it only covers you if your client visits you in your home office, not if you visit the client.

What about full-time or part-time workers in my home or working in their homes?

  • If a full-time or part-time worker is hurt in a work related injury, you are responsible for the medical bills, whether or not you carry workers’ compensation.

What is the difference between an Independent Contractor (U.S. Income Tax Form 1099) and Employee (Form W-2), when considering liability and workers’ compensation?

  • Many people use independent contractors instead of employees for tax reasons, but an independent contractor without his/her own insurance becomes your responsibility for liability and workers’ compensation.

What happens when a client or visitor comes to my house?

  • Your Homeowners policy covers personal visitors but is not designed for business visitors, so business liability insurance is needed.

What happens when I go to a client’s office location or other location for a presentation or meeting?

  • Your homeowners’ personal liability does not apply when you leave your home on business-related activities, so business insurance is needed.

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