Home-based Business Insurance: Costs, Coverage & Companies

Cody Cromwell
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Home-based Business Insurance Providers

Before beginning your search for home-based business insurance, it’s important to understand what exactly you’ll be looking for in a policy.

In order to determine your needs, we suggest the following questions:

  • What are your business premises? Are you renting office space from a landlord or are you in a shared office?
  • How much is the business project worth?

How much are you spending on incremental costs (i.e. equipment & equipment maintenance, cost of travel & accommodation)?

What are your business risks? Can you increase your business insurance accordingly?

How will you assess whether the business product you’re selling is viable and will reduce the risk of risks?

What additional business insurance should you have? (we’ll cover this more in-depth later in this post)

Are you in a risky industry?

How much time do you spend away from home on business?

You’ll be investing quite a bit of money in your business, so you should also evaluate the likelihood of these risks affecting your business:

  • Risks of a natural disaster (like earthquake or floods)
  • Financial risks (banks suspending your account)
  • Risks of fire (in the workplace/premises)
  • Risks of theft (in the workplace/premises)

Top Home Business Insurance Providers

Depending on the size of your business, the number of employees, and the number of locations you have, you might want to consider working with one of the top home business insurance providers.

If you’re trying to decide which one to use, keep in mind the fact that they all have the same policies in place and offer the same coverage. They are just priced differently for varying size businesses.

In this post, we’ll give you a run down of the top 10 home business insurance providers and answer a number of common questions. If you scroll back up, you should have found our previous list of the best home business insurance providers with their rates so feel free to check those out as well.

Generally, the top home business insurance companies also happen to offer flood and fire insurance policies as well. It’s always best to have all the basics in place.

Why Should You Choose a Qualified Home Business Insurance Provider?

Getting your home business insurance rates quotes from one of the top home business insurance providers may seem like a waste of time, but that’s probably not the case.

Sure, you could sign up with one of the big shopping malls or local offices that offer home business insurance (and sometimes they’re even cheaper), but remember that personal service is important when you are choosing a home business insurance provider. That’s what you get with an insurance agent or broker.

The Hartford

The Hartford calls itself ”More Than Insurance.” They are one of the largest home-based insurance providers. Started in 2015, The Hartford offers pretty much the same insurance to independent insurance agents who are not licensed by an insurance company as part of the stock insurance agency. The Hartford works quite similar to how an agent is working.

The Hartford also provides insurance products to large commercial businesses that does not have a full-time agent, including small to medium size businesses. These are often run by independent contractors, managers or owners.

How much does it cost?

The cost of insurance is based upon the firm’s solvency margin. The solvency margin is a percentage used in insurance underwriting in which The Hartford evaluates the asset of the company and a percent of that percent is used to determine the premium charge. The Hartford maintains an 80 solvency margin for most of its products, which provides insurance coverage for a minimum of three years.

Premiums for The Hartford are based on a percentage of the surplus assets of the firm, and the percentage is calculated based upon the premiums two previous insurance companies have paid in premiums. The Hartford is not an insurance company but a risk retention group that maintains an individual account for each policyholder and pools all claims together.

What are the benefits?

AP Intego

AP Integro is a Barcelona, Spain based insurance broker and agency that provides business insurance to home-based entrepreneurs. The rates are full coverage, and each policy covers everything a business needs and enables the entrepreneur to work from home with reliable backup protection.

The company’s policyholder base has grown substantially since 1995, when it became the first home-based insurance broker in Spain. The company now has over 20,000 business owners as customers.

Features of their business policies include: … Carry-over of policy benefits for 1 month/50% of premium in Spain, France and Portugal;

  • Worldwide coverage for claims, including certain exclusions … One limit per policy;
  • Hotels & Travel, Health, Home Accident, and Fire and Theft coverage;
  • Mobile devices insurance;
  • Worldwide coverage … 29 countries served.

The agents can help you figure out your needs and determine the right policies that best fit your business.

Hiscox

As a second-order approach to on-site insurance, the HIPROX insurance is perhaps the most common form of on-site insurance for homes and business.

HIPROX stands for Home-Based, Internet-based, Physical Occupancy and is thus named Hiprox as the house is physically present at the listed address, the office-based jobs are conducted from a space at home, and the work space/home is largely used for these purposes.

What are the considerations for HIPROX coverage?

The main considerations for HIPROX insurance are that it provides protection for a limited series of Home or Business risks where you don’t directly or clearly use hard assets for operations. This is for example an office (home based) homeoffice, a remote home office that is dedicated to your business.

The HIPROX policy is a line of business that can be added to a standard personal umbrella or can be insured as a stand-alone policy without the need for Umbrella coverage. Hiprox provides coverage for a limited series of risks where you don’t directly or clearly use hard assets for operations.

Some of the risks covered are:

A need of extra Cash quickly in case of:

a loss of Stock, capital of the business, inventory, or property.

Farmers

Farmers’Insurance is one of the oldest forms of insurance. It was considered the only reasonable way for farmers to protect their crops against loss or damage – wind, hail, bad weather, fire, theft, molds, drought. Farmers were once required to maintain policies to protect their entire farm and to insure the entire crop they had planted or purchased. The policies were based on the crop insurance program created and provided by the United States federal government but it was an expense borne by the farmers and not under government regulation.

Over time, the insurance carriers marketed their policy offerings in such a way as to encourage farmers to make the coverages available to them mandatory. The companies would sometimes manufacture losses to demonstrate why farmers should purchase insurance. In some cases the companies created much larger claims than those actually sustained.

Progressive Commercial

Emergencies happen. From medical expenses to household catastrophes, injuries, and theft, no matter where you work, your insurance needs are wide-ranging.

We believe every business owner should have a plan of action to protect their business. Pay Insurance Day, a meeting or conference, has always been the top priority and key objective of many businesses.

One of the biggest challenges we face today is having to plan ahead. Insurance plans used to come in waves. Now, insurance companies are starting to have five-, ten- and fifteen-year liability insurance plans. This is not the time to be complacent. Pay Insurance Day should be a priority, not an afterthought.

It is important to keep in mind that the insurance companies you work with only offer a certain level of coverage. The insurance you need to protect your business will vary based on your needs and income and should be tailored to your business. Here are a few guidelines to help you in your decision making.

Think of the different ways your business might be impacted. If you own a car, is it covered? If your business operates out of your home, do you need to be covered for property damage? If hired staff, contractors or others are working for you, do you need to be covered? What about your home? What do you do if you have to relocate for business or property damage?

How Home-based Business Insurance Works

Most home-based business owners buy insurance to protect themselves as well as their employees and personal property. The type of coverage you choose depends, in part, on your industry and the size of your business.

The easiest way to select a policy is to use a tool that compares similar coverage. This tool, called an insurance policy search engine, should be used to select a policy with insurance company, type of coverage and pricing. You also can search by state, or by type of insurance.

An insurance policy search engine gathers information about insurance companies from the internet and displays it in a way that allows you to easily compare coverage features.

An insurance policy search engine is also a good way to learn more about insurance coverage.

Although there are many different types of insurance available, insurance policies often are grouped together based on a similar level of coverage or the type of business they cover.

The following types of businesses typically need liability coverage:

Home-based businesses also may need property or liability coverage:

Coverages offered by typical home-based business insurance policies often include:

Property coverage usually is limited to damage or destruction of property due to a perils such as fire, theft, vandalism, or windstorm.

Home-based Business Insurance vs Home Insurance

Many people don’t realize that a home insurance policy does not cover your home-based business. That’s why a separate home-based business insurance policy is necessary.

With a home-based business insurance policy, you can add coverage for your home-based business and even your high-tech business technology equipment.

Consequently, the policy will include protection in the event of a burglary, accident, or other disaster. You can also add the necessary business liability and professional liability insurance for your business.

And while the premiums will be higher than a homeowner's policy, they won’t be as high as traditional business insurance.

If you own a home that is used in a business, or you run a home-based business, you need a policy to protect your home, your business and your property. If you are looking for extra protection beyond your homeowners’ coverage, a separate insurance policy is advisable.

One of the major differences between a home insurance policy and a home insurance policy is a home-based business insurance policy covers your business equipment. Typically, homeowners’ policies do not include coverage for businesses.

Types of Home Business Insurance

Insurance for your own business is not the only type of business coverage available to the self-employed. There are several categories that fall under the broader business and commercial umbrella, and they each have their own differences. Below we break down the top types of business coverage for the self-employed you’ll want to know about.

General Business Insurance

General business insurance is what most people think of as traditional business insurance … it deals with the physical assets that are accumulated by a company or business owner. The policy can be used to provide extended coverage for anything related to the operations of the company, including equipment, inventory, office policies, and more. General business insurance also includes liability coverage (i.e. protection for being sued) and contract coverage.

General liability is included in general business insurance, and goes above and beyond the liability coverage provided by homeowners’ insurance or renters’ insurance. General liability covers losses from lawsuits, as well as expenses on behalf of the company, such as attorney fees, court costs, settlement costs, etc.

Common Types of Home Business Insurance

Business insurance is all about protection, and the number of possible plans will depend on the kind of business you conduct. The four most common types of business insurance plans are business property insurance, personal property insurance, general liability insurance, and business liability insurance.

Business Property Insurance

Business property insurance covers the tools, equipment, inventory, vehicles, office space, and other assets you use in your business. Business property insurance plans are not limited to industrial companies but also serve the needs of people who own and operate their own businesses. Here are a few examples of what you may find included in some business property insurance plans:

  • Business storage unit insurance
  • Product replacement insurance
  • Business liability insurance
  • Business vehicles coverage
  • Business liability optional coverage
  • Business technology protection insurance

Business personal property insurance.

Business Property Insurance A general rule is, the more the merrier, because this equipment can vary widely. Let’s say you own a small manufacturing business with a handful of machines. Your business property insurance could include a single piece of machinery, such as a drill press, a computer, or a large-scale manufacturing line. On the other hand, if you own a large, sophisticated manufacturing plant with hundreds of machines, you may need a much bigger policy. Insurance carriers will look at the following factors when determining how much protection you need:

Commercial General Liability

Commercial Property Insurance

As a home-based business entrepreneur, there is a lot of financial risk associated with running a home-based business. That’s why it’s important to have the best home business home insurance coverage.

Here Are Some Benefits of Home Business Home Insurance

Proper coverage of your business and assets becomes essential as your home business ventures grow in scale. Without the right coverage, it can cause huge losses to your business, family, and personal liabilities. Having home business home insurance in place can safeguard your business against these losses.

The scale of the insurance coverage is also linked to your coverage for your home. If you own a home, you’d want to have a combination of both a home insurance policy as well as a home business home insurance policy. This is so that your home and home business can be adequately secured.

If you have a business that is thriving, your home and personal assets might get damaged. For instance, if your business’s office is flooded, your business earnings will take a hit. So having a business home insurance policy can help to cover against these potential losses.

Errors & Omissions Insurance

Errors & Omissions (E&O) insurance covers a business owner for expenses, damages and losses that result from a breach in a contract or a policy. It helps cover businesses that are involved with construction, home improvement, real estate, manufacturing, food processing, hospitality and even publishing. E&O is especially important for home business owners since they are their own broker, contractor and insurer.

Generally, business owners purchase E&O insurance on projects or products that they sell – not on projects that they build. So, you’ll probably want to limit your coverage to cover costs linked to your business, such as liability, contract and inventory risks.

A home business owner who includes their personal insurance company as an E&O insurer won’t generally be covered if a policy lapses, since coverage is usually only provided when a policy is active.

As a result, a home business owner will generally need to be covered under separate policies, which are each named in the E&O policy. Be sure to check with your current policy to see if it provides you with coverage.

In addition, carrying business insurance will make it easier to recoup your expenses if someone sues you. Find out more about real estate insurance here.

Workers’ Compensation

Every state has their own workers’ compensation laws. Every state also specifies the requirements for businesses with employees. In the United States, worker’s compensation policies are designated as private insurance to be purchased by the company, whereas federal law mandates that a state agency is paid by the insurance company with a certain amount per claim to set premium rates.

Needless to say, there is a huge difference between a government insurance policy and a private insurance policy. So, to optimally cover a company, workers’ compensation insurance should be tailored.

If you need a worker’s compensation insurance policy that will work best for your company, there are a few ways to find this information. Firstly, you should look out for your state’s established rating organization. In New York, that agency is the State Workers’ Benefit Board.

Secondly, you can check out a local brokerage such as Everstep Insurance Agency. We can assist you in determining what policy is right for your company.

Thirdly, you can utilize the Internet. You can search for insurance company profiles or conduct a specific risk analysis. There are plenty of resources available online.

Homeowners Policy Endorsement

Typical Home-based Business Insurance Costs

By definition, a home-based business is any business that is conducted from a home or in which the majority of the business operations is conducted from a home. There are many kinds of home businesses, including anything from a few days of work each week to a full-time business.

In recent years, the home-based industry has boomed. There are a number of economic and social reasons for this, including the fact that many wage and salary earners can’t find work, which opens up the door to self-employment. The recession also has driven people not only to opt for self-employment such as independent contractors and consultants, but people are also taking part-time jobs to make ends meet or to supplement their full-time salaries.

The growth of the home-based business industry has also opened the doors to a host of home-based insurance carriers, which are also seeing great growth. The growth has been helped by the fact that the government has worked to insure the industry.

Cost of a Home-based Business Endorsement

Chubb: No

CNA: No

First American: No

Green & Green: No

Wesco: No

A standard home insurance policy does not include coverage for a home-based business. Although home insurance doesn’t include coverage for a home-based business, you can support your business operations by purchasing an endorsement on your home policies. The costs associated with an endorsement vary based on the company you select, as well as your coverage chosen.

Chubb, First American, and Green & Green are all reputable companies and don’t charge any extra premiums for an endorsement.

First American…

First American offers the best plan for the money. The First American business insurance policy comes with three endorsements, including Homeowner’s coverage and two business-related endorsements:

  • Business Auto Insurance
  • Business Liability
  • Business Property

Tips on Applying for Home-based Business Insurance

Most people in the United States own a home, which makes it very common for most people to start a home-based business of some kind. There are a lot of different ways in which you can start a home-based business. The main one is starting a home-based business in your spare time and making extra money at home.

While this may require you to sacrifice a number of things in your personal life, it is a lucrative financial investment for the future. As a bonus, you are more likely to feel as though you’re making a difference in your community and help others by starting a home-based business.

Even with all the benefits, there is still a risk of losing money. You have to take into consideration the possibility of failure when working from home.

If you open your own computer repair or cleaning service in your home and it fails to draw in business, then you have lost your investment.

So, to avoid this, you should get home-based business insurance to cover you. Home-based business insurance can protect you financially in the case of a financial loss or business failure.

Not every company offers home-based business insurance for these reasons. As a result, finding a reliable and economical insurance plan may not be as easy as you think. This article will help you identify which insurances are available to you and how to get started on getting coverage for your home-based business.

Know What Types of Home-based Insurance You Need

Whether your home-based business is a one-person operation that you run out of your home or a large one with multiple employees, you are going to need home-based business insurance.

Home-based business insurance policies include liability coverage for your business and the building, as well as business assets. They typically cover the kinds of risks that home-based businesses face.

Since home-based businesses are not required to have their own building locations, it’s often difficult for them to purchase commercial insurance. With that in mind, as a self-employed person you will probably have an easier time finding a home-based business insurance policy if you run your business from your home.

Home-based businesses offer a number of advantages. They allow you to be in sync with your daily waking and sleeping hours. They also offer flexibility, since you can carry out your business on a schedule that’s convenient for you.

Home-based businesses are also a great way to build your personal brand and business. As your business grows and expands, this will allow you to showcase your talents and showcase your project to the world.

Confirm What’s Covered on Your Homeowners Policy

One of the risks you’re likely to face while operating a home-based business is the possibility you’ll be sued if someone falls while using your services. Unfortunately, homeowners insurance may not be enough to cover damages stemming from a slip-and-fall or other accident. So if you’re an expert skier, whirlpool tub installer, or other type of business owner, consider adding business insurance to your home office policy.

Determining if you need business insurance can be tricky because your homeowners policy may not cover it. You do want to make sure you have a plan in place to pay the deductible and it would be helpful to know how big of an impact it could have on your overall policy costs. So to get started, here are a few things to check before making the decision about whether or not you’ll be adding business insurance to your policy.

Does Your Home-based Business Use Equipment, Products, or Services?

Get Multiple Quotes

The best way to pick the best company is to compare multiple quotes from different companies. There are a few reasons why getting multiple quotes is important.

First, all policies will vary based on your needs and what you are looking for. The different companies will take a different approach to things like medical conditions and how the family is covered.

Second, you don’t want to be stuck with a policy once you’ve picked a company you like. This is why online insurance quotes can be so important.

Third, many online sites will require you give some personal information (first and last name and address) after you submit an application. This is your opportunity to change your mind and go back to the same site and have it all cancelled.

Of course, there are also some downsides to getting multiple quotes. For starters, some sites require you to pay for your insurance quote before they give you a price. If you don’t feel like providing this information online, you can still try to find a site that will give you a quote for free.

Other tips to consider include looking for the following potential red flags: pricing, benefits, and types of policies offered. Picking a company that doesn’t offer a certain type of coverage (such as long-term care), or has the highest price, is not the best solution.

Home Business Insurance Frequently Asked Questions (FAQs)

After years of being broke, building a home business has finally allowed us to put money in our bank accounts, and pay off some of our debt. It’s been wonderful, but we’ve had a few hiccups along the way …

One of the biggest bumps we’ve had is finding home business insurance. It doesn’t come with the fun business name, but it’s something that will protect your investments and keep them secure.

We’ve talked to hundreds of people on our business coaching team and asked them what they wish they’d known about home business insurance. Over the years, we’ve compiled the top five questions and answers below, along with a few others for good measure.

Are Home Business Insurance Rates Different From Commercial Business Rates?

Home business insurance seems to cost on average about 20 to 25 percent less than what a commercial business would cost, simply because the coverage is minimal. It’s one of the reasons why we recommend first starting out with a simple home business while you get the hang of it.

How do I know if I need home business insurance?

A business, be it a full-time or a side hustle, can easily fall into the realm of being considered a home business. After all, we do most of our work at home, right?

It's important to differentiate between operating a business in your home thanks to a home office and having a home-based business. This is because having home office insurance coverage does not make your business a home-based business. Your personal property coverage does not apply, and you might not have coverage for some risks you face as a business owner.

Even if you operate a home-based business, having no insurance coverage doesn't mean your business can't fail. You'll still have responsibilities toward stock and building inventory, people, and other financial obligations. Without coverage, you could be left scrambling to cover costs on your own or rearrange insurance with other businesses. That doesn't sound ideal.

Instead, if you're looking for home business insurance, look into the following types of coverage.

Does homeowners insurance cover business property?

Yes, homeowners insurance does cover business property and you need to report any business property to your insurance agent so that they can provide you the appropriate premium for the coverage you need.

Just like any home or home office, your office will be covered as business property.

The purpose of having a business property insurance is to help protect your business against liability claims (for damage your business has caused to another business’s property).

The benefit of having a business property insurance is that it covers you, your employees, and the customers who are in your building. Business property insurance also covers some physical damage if a business loses electricity, power, heat, or water.

If you own a home office in your home, you may want to consider adding a business property insurance to your home insurance coverage. A business property insurance can protect your home business from damage and loss.

Just like any other business, having a home office can bring you in contact with other businesses, merchants, malls, dealers, your employees, and clients. Contact your insurance agent for assistance with coverage of your home business.

Is home-based business insurance tax deductible?

Home-based business insurance is unique in that it is not considered a business expense but rather a personal expense. In fact, your home-based business is considered a sole proprietorship, meaning that it is taxed as personal income. This means the only thing that you can deduct on your tax return is the operating expenses of your business.

Home-based business insurance is not a retail item and is not considered a necessity and therefore is not applicable for the home expense deduction. However, as a business expense, insurance for your home-based business is subject to tax deduction. Therefore, there is an incentive for business owners to insure their home business.

If you are a sole proprietor, you can deduct premiums paid on your home business insurance by subtracting it from your taxable wages (if you are paid wages) or your business operating expenses (only if you itemize expenses on your tax return) on your Schedule C and then from your adjusted gross income.

If you choose to deduct your home business insurance premium, you need to be aware of the tax deduction potential of home business insurance as it is a very, very small deduction compared to the potential tax savings you could receive from deducting your premium from your wages. For this reason, it is recommended that you keep your home business insurance premiums to a minimum to correspond with the small business deduction.

Does a part-time home business need insurance coverage?

A home business insurance plan is often required for businesses that charge a fee for an individual or company to use their services or products. If you are a home business, you are selling a service or product to the public. Insurance companies are well aware of this and, therefore, may use a quote form template for vendor insurance.

Whether you are in a full-time business or a part-time business, it is important to take time to evaluate the risks to your business. An experienced home business insurance professional can help you make this evaluation.

If you and other family members are employed by the home business, you may also consider life insurance for your family. It is important to consider every angle of your business when compiling insurance needs.

Risks home businesses can encounter include bodily injury, property damage, and theft. Someone may trip and fall and suffer a concussion or broken bones. If a family member has to be treated in a hospital for such an injury, you will have to pay for the care and the hospital room. This expense will add up quickly if it is not covered by insurance. You may need property coverage if you have a home business and your home is damaged or destroyed. You also might need liability coverage in the event that someone sues you over an accident in which you were involved while soliciting business in your home.

Bottom Line

To get the best protection at the best price, you need to compare insurance rates offered by various companies, both through online search and contacting companies in your area. When comparing, you’ll have to ask yourself if the insurance is right for your business. If you’re starting a single agent insurance agency, the right coverage is essential. If you’re planning on starting a partnership, office manager or employee insurance is typically best. It all depends on how many people you’re planning to hire and what the risks are for your consumers.

As we will discover throughout this page, there are a wide variety of types of coverage. Term insurance usually requires a longer commitment than a policy where you pay a monthly premium, but the premiums on annual term policies typically are lower than the monthly premiums. When debating which type of policy is best for you, consider the following questions.

What kind of insurance will I need?