Make sure your livelihood is protected

If you own a freelance, online, or ecommerce business and work at home, you might think you don’t need extra insurance. This is a mistake many home business owners make. There are many things that can go wrong that could lead to financial hardship. Anything from a client getting injured on your property to a fire or flood that damages office equipment or ruins inventory can become a big problem. If you aren’t covered, you could get left holding the bag. If you were to find yourself on the wrong end of a lawsuit and don’t have adequate insurance, the financial hit could be even worse.

Accidents, loss of inventory and possible lawsuits are a reality of any home-based business. Yet, an Entrepreneur article states, “Sixty percent of home-based businesses lack adequate business insurance, according to the Independent Insurance Agents & Brokers of America…”

You might think your homeowner’s policy should be sufficient, but that is not always the case. According to Entrepreneur, “Most home-business owners have little or no coverage from their homeowner’s policy. What’s more, if you file a homeowner’s (or renter’s) claim for losses sustained by a previously undisclosed home-based business, your insurer may refuse to cover it or cancel your policy.”

So, we’ve covered why it’s important to have insurance for a home-based business. Now let’s talk about what kind of insurance is necessary.

1. A rider on a homeowner’s or renter’s policy

One easy way to get coverage is to add to your existing homeowner’s policy, which can get you up to an additional $2,500 in coverage. This might be the answer for a one-person business that doesn’t include a lot of equipment or merchandise – for example, an accountant or freelance graphic designer. However, this type of coverage would not cover things like personal injury or property damage.

2. An in-home business policy

This type of policy can cover as many as 3 employees and up to $10,000 in losses. It covers business equipment and liability in the event of an injury.

3. Business owner’s policy

If you need more than $10,000 in coverage, this should be your choice. It’s the same policy brick-and-mortar stores use. These plans cover damage or loss of business equipment, injury liability, loss of critical records, malpractice or professional liability, loss of income, or business interruption as a result of a natural disaster.

Do you need liability insurance?

You might also think about obtaining liability insurance for your home-based business. There are 3 types of liability insurance:

1. General Liability Insurance – This type of insurance covers lawyer’s fees, damage to property, medical bills, or other costs associated with a lawsuit. It does not cover work-related issues such as a project not being delivered.

Examples of how general liability can protect you:

• A client trips over a hole in your driveway and breaks a bone

• A coffee mug is knocked over onto a client’s laptop and he/she sues you to replace it

• You badmouth a client on social media and the person sees the post and sues you

2. Professional Liability Insurance – This is also called “Errors or Omissions Insurance.” It covers any mistakes you might make in the course of a project or a job not being delivered on time (or not at all) for some reason.

3. Cyber Liability Insurance – This type of insurance might be more suited to a business in the IT field. According to, “Cybercrime and data breaches are increasingly big potential threats for any small IT business. If a project you work on for a client results in customer data being stolen, you could be looking at a substantial lawsuit.”

If you own a home-based business, make sure to protect yourself with adequate insurance. For help determining the type of policy or coverage you need, contact Avante Insurance today.