Is Your Home Business Really Insured? Homeowner's and Business Owner's Coverage Explained

Is Your Home Business Really Insured?

About 50% of businesses are home-based — a statistic that has remained constant for nearly a decade. Working from home is very convenient, especially for new business owners trying to save money and turn a profit. That’s why many rely on their home insurance to cover damage, loss, and theft of property. But that coverage may not be enough.

Did you know that a standard homeowner’s policy only covers up to $2,500 in business equipment? While this may be enough to cover your computer and other small equipment, it is unlikely to provide adequate coverage for many other common claims.

Claims that Your Homeowner’s Policy Won’t Cover


For instance, consider what would happen to your home-based business in one of the following scenarios:

  • A client or employee falls and is injured on your premises. The cost of medical bills can run as much as $30,000.1
  • A theft leads to the loss or damage of your samples or inventory. The expense of replacing these items could put your business in financial trouble.
  • Your computer is stolen and you lose sensitive client data. The average cost for each lost record is $150, depending on the industry, the cost can be higher.2

Without the right business coverage, you may end up paying out of pocket for these expenses – putting at risk what you’ve worked so hard to build.

Here’s the good news: you have options, and they’re not hard to take advantage of. By taking steps to fill in the gaps in your coverage, you can work to ensure that the above scenarios — or other unforeseen events — don’t sideline your business.

A standard homeowner’s policy only covers up to $2,500 in business equipment.

Give Your Home-based Business a Chance to Grow

You’ve poured your heart and energy into your home-based business. Now keep it safe with insurance that covers more than just your basic equipment. Types of insurance available for home-based business include:

General liability (GL)

Also known as business liability insurance, GL can protect you from many claims including bodily injury, property damage, personal injury, and others that could arise from your business operations.

If a lawsuit is filed against your business for a covered loss, your GL policy will also cover the legal costs to defend you, including attorney fees and court costs.

Business owner’s policy (BOP)

A business owner’s policy, or BOP, includes property and liability protection in one bundle that can save you money; one affordable policy, infinite peace of mind. With a BOP, you’re protected from:

  • Disasters, like severe weather and theft.
  • Unsatisfied clients who want a refund on a good or service.
  • Lost income, because you still have bills to pay.

The specific types of coverage you need for your home-based business will depend on your business or industry. Unsure of what your home-based business insurance needs? Contact your independent insurance agent to discuss your options and plan for when your business grows.

1Small Business Administration
2Ponemon Institute – 2019 Cost of Data Breach Study

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Liberty Mutual’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks as an explanation of coverage or benefits under an insurance policy. Consult your professional advisor regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Liberty Mutual is not endorsing them.