Is a Business Operated in the Home Covered Under Homeowner’s Insurance?

New technology and marketing innovations have ensured that up to 50 percent of Millennials and almost 45 percent of other Americans work from home. Companies have been hiring independent contractors and employees who work from home for several years now. Home businesses are among the big things today.

The question is, will these entrepreneurs and home workers be covered by their home insurance in Cabot AR, should anything untoward happen to them? Do you keep stock in your home office? If a fire occurred, would your desk, computer, and data be covered? If someone was injured while you were doing business at your home, would your insurance cover it?

Definition of Business

Most policies define a home business as a full or part-time trade, profession, or occupation engaged in for economic gain, according to The Balance Small Business. Some policies include in this definition home day-care provided at no cost, volunteer services, and other activities, according to the same source.

Home Insurance Coverage

Homeowners insurance covers a home, not a business. However, some concessions may be made by home insurance in Cabot, AR:

  • Limited coverage for damages to a property with a home business. The limit could be $2,500 or $250 for your computer.
  • No outside structures like a shed would be covered.
  • No coverage for damages to or loss of business data and records.
  • No coverage for income loss resulting from the loss of the home business.

What You Can Do

Some insurance companies offer endorsements to owners of home businesses. This increases the amount of liability if the home business owner meets certain requirements.

Another idea is to buy a commercial property policy that covers your business equipment and furniture. If this isn’t an issue, you can buy general liability policies that cover lawsuits or injury to business associates, customers, or business guests.

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