A home-based business may not be covered under your home insurance policy. You may need to add one of the following options (if available) to help make sure you're protected.
Option 1: Homeowners Policy with Business Property Increased Limit
Your State Farm® homeowners policy will cover up to $1,500 worth of personal property, such as a desk, or merchandise held as samples (i.e., Mary Kay Cosmetics). The coverage is intended for business use while property is on the residence premise, and up to $750 worth of property when the property is away from the residence premise. If your home-based business is small, this might be enough. If not, you have the option to increase those coverage amounts with a homeowners policy endorsement. You might consider this if you:
- Only plan to have less than $4,999 worth of business property kept at your home-based business location.
- Don't invite customers to your home-based business location.
- Only have $750 worth of personal property intended for business use outside your home.
Option 2: Business Insurance Policy (Highly Recommended)
While your homeowners insurance policy comes with liability protection for incidents that happen inside your home, this coverage does not extend to home-based business-related activities—for example, if a customer comes to your home to exchange payment for goods or services and suffers an injury, there may not be coverage. Coverage gaps can easily be fixed with a Business insurance policy, which also provides Loss of Income coverage. You might consider a Business insurance policy if you:
- Offer services in your home, such as tax preparation or hair services, which may require additional specialized liability coverage.
- Plan to have $5,000 or more worth of business property kept at your home-based business location.
- Rely on the income from your business to support your household.
If you're using your vehicle for home-based business-related activities, ask your agent about getting it rated as a business vehicle on your auto policy to make sure it's properly covered.
Talk to your agent today for additional information and help getting started.
This is only a general description of coverages and is not a statement of contract. Details of coverage or limits vary in some states. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.
Because insurance protection is a contract, any coverage descriptions in this article are general only and are not statements of contract. All coverages are subject to all policy provisions, including applicable endorsements.