When you run a business from your home, no matter how small, you will face risks associated with it. Having insurance to protect yourself and your business when the unexpected happens (and it will happen) can mean the difference between the success or failure of your home business.

Don’t assume that your homeowner’s or renter’s insurance policy will automatically cover your home business. Your policy may offer very limited or possibly no protection at all for your business, so it's important that you obtain adequate coverage, just as you would a non home-based business.

Coverage Tailored To Your Needs

What kinds of home-based business insurance do you need? The answer depends very much on the nature of your home business, as each business faces unique challenges.

Also, keep in mind that certain types of businesses, home-based or not, may need special kinds of insurance.

Although your business may not require every insurance option listed below, “Worker's Compensation Insurance” is a requirement in the state of Maryland if you plan to have employees.

Auto Insurance (Commercial) - If your home business involves a significant amount of driving (You decide to use your SUV for a Kiddy Taxi Service), you have others that do driving for you, or you own a business related vehicle, you will probably need to consider commercial auto insurance.

Business Interruption - Covers your lost revenue and operating expenses if you're forced to suspend your business activities because of fire, flood or natural disasters.

Completed Operations Coverage - Protects you from liability if for some reason your client is injured or damages occur as a result of services that you have provided at a clients site or premise.

Contents Insurance - Covers your business equipment from perils such as fire, flood, or theft.

Errors & Omissions Insurance (Professional Liability) - Protects you from clients who could claim to have suffered damages because your advice was inadequate, incomplete or negligent. For example, a consultant, software developer, accountant, or financial planner.

General Liability - Covers injuries to clients, employees, and those making business deliveries (couriers and delivery people) on and outside your business premises. It also protects you if someone is injured as a result of using your product or service.

Personal Disability - Can replace a portion or all of your gross income on a tax-free basis should you become ill or disabled and unable to produce an income.

Product Liability - Protects your business from liability resulting from the non-performance of a product that your company supplies, designs or manufactures.

Property Insurance - Protects the assets your business owns, including the building, equipment, and inventory from theft, destruction, or damage in a flood, fire, or other disaster.

Worker's Compensation Insurance - Compensates employees for work related injuries, occupational diseases, or death. This is a requirement in the state of Maryland if you have employees (home-based or not).

So rather than purchasing coverage individually, you might save money by buying a “Package Policy“, such as a (BOP) Business Owners Policy, or a Home Office / In-Home Business Policy, or by adding an Endorsement or Rider to your existing homeowner’s policy.

Again, this will depend on the needs of your particular business, so do your homework!

(BOP) Business Owners Policy - A type of package insurance that typically includes property insurance, business interruption insurance, casualty or liability protection, crime insurance, liability insurance, and vehicle coverage for rented or borrowed vehicles.

Home Office or In-Home Business Policy - Basically homeowners insurance and a business policy rolled into a single policy designed specifically for home-based businesses. These policies cover lost income and ongoing expenses such as payroll for up to one year, provides limited coverage for loss of valuable documents, accounts receivable, off-site business property and use of equipment, and homeowners coverage’s such as fire, theft, and personal liability.

Homeowners Insurance Endorsement or Rider - Most companies that offer home insurance will provide additional insurance for home-based businesses by adding a rider or endorsement to your existing home insurance policy that will cover other structures or equipment on your premises that you use for business. They generally exclude product liability, disability insurance, professional liability insurance, loss of income, workers compensation (which you must provide if you have employees), and other commercial coverage’s.

Where To Start Your Search

1.) Talk to your home insurance agent.

2.) Do an online search (ex. ___ insurance or insurance for ___).

3.) Ask others in your line of business for recommendations.

4.) Check out professional or business organizations such as …

• Chambers of Commerce
• Home Business Associations
• Small Business Development Centers
• Trade Associations

Take time to carefully evaluate your home business insurance needs, shop around, compare prices, and ask lots of questions to ensure that you get the best coverage for you and your business.

Maryland Insurance Administration (MIA) - http://www.mdinsurance.state.md.us

Maryland Worker's Compensation Commission - http://www.wcc.state.md.us

Nationwide - Offers a "Business Owners Policy" package, Workers Compensation Insurance and other options.

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