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Small Home-Business Insurance

Limited Home Business Coverage

It’s never been easier to run a small business from the comfort of your home — in fact, more than half of all small businesses in the United States are home based. And if you’re one of the millions of entrepreneurs running daily operations from your residence, it’s important to understand how to safeguard your investment from the unexpected.

Let’s take a closer look at how small home business coverage can help protect the dream you work hard for each day.

Home Business Insurance Coverage

You may think that your small home business is covered by your standard homeowners insurance policy, but that’s not the case. Actually, if you’re planning on conducting any business from your home and want coverage for liability events such as a customer slipping and falling on your front steps or coverage for damage to your business property, such as a fire ruining your equipment, you’ll need to add limited home business coverage and/or business property coverage.

What Is Limited Home Business Coverage?

Limited home business coverage is an optional coverage that small home-based business owners can add to an existing homeowners insurance policy. By adding this coverage, you’re extending the same liability limits and coverages of your personal home insurance to your small business. As you begin to think through what kind of protection you need, it’s important to consider whether or not this limited protection is enough for your business or whether you need a more specialized commercial policy, which has more extensive and broader coverage. Your skilled insurance agent can help you make the decision and select the coverage you need.

Business property coverage covers property up to $15,000 from the same types of losses listed on your home insurance policy. So if you face damage from a loss, such as theft or fire, your business personal property will be covered for up to $15,000 worth of damages. Without business property coverage, your homeowners policy is limited to $1,500 for business property.

What Types of Home-Based Businesses are Covered?

Businesses commonly covered under this type of insurance include:

  • Accounting/ financial planning
  • Editorial services
  • Event planning
  • Florist services
  • Graphic design
  • Hair styling/barbering
  • Home demonstration (jewelry, cosmetics, home goods)
  • Jewelry making
  • Music, dance or yoga instruction
  • Photography
  • Tailoring
  • Tutoring
  • Tax preparation
  • Web design
  • And more!

Do you run a home daycare? Limited home business coverage provides protection for your pint-sized business, but if you’re watching over pint-sized people, you’ll want to connect with an American Family agent to discuss home day care coverage.

Do You Need Home-Based Business Insurance or a Commercial Insurance Policy?

Home-based business insurance is for homeowners who run a small business from their home. While this coverage is great to have, you’ll need to determine if your small business is sufficiently covered by limited home business coverage or if you’ll need a more extensive commercial insurance policy.

What’s the difference? Consider the property coverage limit of $15,000. Would this be enough to cover all of your business property — including the items you sell, and the tools and materials you use to make them — in the event of a loss? If not and your total property value surpasses the limited home business coverage limit, a commercial policy is in your best interest.

A commercial policy provides broader liability coverage as well, including coverage for liability arising out of any products you make or sell. Here’s some more info about why your business needs insurance that will better help you determine which type of coverage you need.

Request a Home-Based Business Insurance Quote

You work hard to make your dream a reality — don’t let your time and effort go unprotected. Connect with an American Family agent to learn more about what coverage your business needs and gain peace of mind that you’re protecting the finances and future of your business.