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home-business-insurance-pa

Everything You Need to Know about Home-based Business Insurance

Running a home-based business offers many benefits. No commute, no dress code, and fewer expenses. It’s no surprise that more than half of small businesses are home-based. That doesn’t include the 55 million Americans that offer freelance services out of their home. Or the growing number of direct sales representatives. What is surprising is that more than 60 percent don’t have the right business insurance in place which means they can lose everything in the blink of an eye.

The Misconception

Many home-based business owners assume their homeowner’s insurance policy will cover their business, but it doesn’t. Homeowner’s insurance protects your personal belongings in the event they are destroyed or damaged by a covered claim. It also covers personal liability claims if a third-party files a lawsuit for injury on your property or your child breaks a neighbor’s window playing baseball in the backyard.

Many homeowner policies include exclusions for business-related activity and property. To fully protect your business, assets, and reputation, you need a home-based business insurance policy.

Scenarios to Consider

Take a look at some the potential risks you face running a business out of your home:

Client Injury:
Businesses that offer accounting, coaching, tutoring, or consulting services often meet with clients in their home. If a client trips on an uneven walkway or a rug injuring themselves, they can file a lawsuit for medical expenses, lost income, and distress. A homeowner’s policy doesn’t protect you if this happens.

Fire Destroys your Inventory:
Whether you are in a direct sales business or make crafts to sell online, if a fire destroys your home and all its contents, the homeowner’s policy can deny coverage. The cost to replace these items and recreate a final product is expensive.

Poor Advice:
If your service business offers advice to clients about steps they should take or implement and it fails, you are at risk for a lawsuit. Can you afford to pay legal expenses if you run a hair salon from home and recommend certain products that ruin your client’s appearance or burn their skin?

Auto Accidents:
Many home-based businesses still need to run errands, attend meetings, or set up at local vendor events. If you cause an auto accident using your vehicle for business purposes, your personal auto policy won’t cover the damage to your vehicle or the other party’s property damage or medical expenses.

Damage to Customer Property:
Home businesses like computer repair shops often keep client’s computers to install new software or make repairs. If you damage this property while it’s in your care, it is your responsibility to pay to replace it.

Where to Find Home-based Business Insurance


Finding insurance for your home-based business isn’t difficult. Contact your local independent insurance agent for more information. They will be able to recommend carriers and offer multiple quotes so you can review your options. Buying home-based business insurance is the best way to fully protect your business from a lawsuit or loss that you financially cannot afford to payout of pocket.

Rumbaugh Insurance has been helping home-based business owners in Hanover and the surrounding South Central PA areas since 1972. Call one of our insurance professionals at 717-632-6001 or fill out the form below for more information.