Q:

Does my homeowner’s insurance cover my business?

A:

No. Most homeowner’s and renter’s insurance policies do not cover claims arising out of your “business activity.”

It’s incredibly important to have insurance that protects your home and belongings from theft and damage. But you can’t rely on that same policy to protect your home business.

For business insurance, you have to consider two types of coverage: assets (computer, equipment, inventory, etc) and liability. Your homeowner’s insurance policy most likely excludes coverage for any liability due to your home business. Here’s what that means: If you invite a guest into your home for a party and they are injured by you or your property, your homeowner’s insurance will step in to cover the liability. But if a business client is injured in the same manner, your insurance will probably not protect you.

Assets have a slightly different outcome. Your homeowner’s insurance might cover some business assets that are inside your home, but coverage is probably limited to a fairly low dollar amount. You should carefully consider this area, especially if you have business inventory or special equipment at your house.

The moral of this story is to check into your insurance policies. See what they say about business activity, liability, and assets. If you have any questions about the policies, contact your insurance agent or an attorney. Once you know what coverage you have (or don’t have), you can decide if you need more coverage for your home business.

This is a bi-weekly feature at Home Office Warrior. Now is your chance to send questions to an experienced attorney. Submit your questions to Andrew at andrew@homeofficewarrior.com or leave your comments here.

Disclaimer: Andrew Flusche is a licensed Virginia attorney, but these posts do not constitute legal advice, nor do they create an attorney client relationship. For legal advice, consult an attorney licensed in your jurisdiction.