Home Based Business Insurance: Cost & Quotes From $11

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A business doesn’t always start in the four corners of a commercial space. Some businesses, not to mention multinational giants, first operated at home. Examples are Google, Amazon, and Disney.

There are many entry points to starting a home based business. Many have tried starting a candle business in the house and succeeded. Tech professionals, like app developers for instance, provide services through a private office. And then, those who love retail start a home-based business by registering as sellers on Amazon or Etsy.

Home based business insurance is a specialized protection program for ventures that operate in a condo, apartment, house, garage, etc. Read this guide to know:

• The function and limit of each home based business insurance policy

• The cost of insurance for home based businesses

• Which insurance companies provide the best coverage

Home Based Business Liability Insurance

Limits Of General Liability Insurance for Home Based Businesses

General liability insurance is useful if you make money as a home based appliance repair technician, craftsman, candlemaker, or soap maker. Consider getting $300,000-$2 million worth of home based business liability insurance. 

General liability insurance grants protection against claims for bodily injuries or property damage that third parties file. This business insurance for home based business provides help when:

• You manufacture candles in your house. An inspector is conducting a check for fire hazards. While moving around, this inspector steps on wax, slips, and sustains a broken hip.

• An independent contractor gets electrocuted by a defective wiring and falls from a height while installing a fire alarm and CCTV camera for your cottage food business

• An employee of a supplier stumbles from the stairs while unloading equipment and stocks for your business

• A client trips over a toolbox in your home workshop and sustains bruises

You use general liability insurance to cover these costs if a claim is filed for bodily injury or property damage:

• Medical treatment of the claimant

• Refunds for the damaged property of the claimant

• Settlements the claimant demands you give

• Attorney fees, court filing fees, investigation fees, and other defense costs

• Court judgments

General liability insurance doesn’t only cover claims for bodily injuries or property damage. It can also solve these problems:

• Claims for copyright infringement, slander, libel, invasion of privacy, and breach of confidentiality

• Equipment loss or damage

• Loss or damage of customer’s property while in your care, custody, and control

• Liability over rented premises

• Accidents caused by a vehicle you borrowed or hired

Professional Liability Insurance for Home Based Businesses

Limits Of Professional Liability Insurance for Home Based Businesses 

Get professional liability insurance if you’re working as a consultant, engineer, architect, or freight broker from an office situated at your condo, house, or apartment. 

Consider getting at least $1 million professional liability insurance coverage. Professional liability insurance grants a shield if you commit oversights or wrongful acts. Here are some situations where this insurance is useful:

• You lost some important documents, and a client’s cargo wasn’t shipped 

• Your design for a building has costly errors

• You excessively charged a client for your services

• You failed to finish deliverables on time 

• You bailed out of a project midway to take care of another one that gives more commission 

• A client wants to keep the details of a project under wraps. However, you accidentally shared confidential information with a third party. 

Professional liability insurance takes care of settlements, defense costs, and court judgments when a client files a claim for negligence, violation of good faith, inaccurate advice, breach of confidentiality, and other covered perils. 

Sometimes, professional liability insurance is underwritten comprehensively that it will also cover the income you lost while attending a court proceeding or investigation. The policy might even cover the cost of proceedings for the cancellation of your license. Contributory damages might even be covered too. 

Important note: General liability insurance doesn’t cover errors and omissions. This policy isn’t enough if you’re working as a home based filmmaker, software developer, web developer, personal trainer, martial arts instructor, or yoga instructor. You need another type of working from home business insurance. 

Product Liability Insurance for Home Based Businesses 

Product liability insurance is offered as part of general liability insurance for home based businesses. This is useful for covering bodily injuries or property damage caused by manufactured products that have:

• Design errors

• Labeling errors

• Manufacturing flaws 

The product liability coverage included in general liability insurance offers $2 million-$3 million coverage. 

If you’re a home based business in the food industry, then product liability insurance can help. This home based business insurance coverage also covers claims customers file because of foodborne diseases, food poisoning, and contamination. 

Commercial Property Insurance for Home Based Businesses 

Limits Of Commercial Property Insurance for Home Based Businesses 

A homeowner’s insurance doesn’t grant coverage if the condo, house, apartment, private room, or garage you use commercially sustains damage or gets destroyed. 

Commercial property insurance does what a homeowner’s insurance can’t. It reimburses losses if the residential space you use to store and manufacture products gets damaged or destroyed by:

• Fire

• Theft

• Vandalism

• Riot

• Civil commotion

• Malicious mischief

• Sinkhole collapse

• Volcanic action

• Lightning

• Impact

• Vehicle

• Aircraft

• Winds

• Snow 

• Hail

• Rain

• Sprinkler leakage

Commercial property insurance also covers the equipment and tools inside the residential space of your home based business. Examples of items the policy covers are computers, cooking equipment, and food processing equipment. 

Important note: See to it that the amount of coverage you get from commercial property insurance is equal to the replacement cost of your home based business’s condo, house, apartment, or garage. 

Workers Compensation Insurance for Home Based Businesses

Your home based business needs to get workers' compensation insurance if it employs one or more people, including family members or relatives (if applicable). 

All states, aside from Texas, grant no exception. The table below shows situations where this insurance is useful, depending on the home based business you might be running right now:

Workers' compensation insurance covers these costs when your employee sustains an occupational injury or disease:

• Surgeries, therapies, private EMT service fees, first aid treatment, and other expenses for medical treatment

• Hospital bills for nursing, medical supplies, food, X-rays, laboratory tests, and others

• Prescription medicines 

• Rehabilitation and retraining

• After-hospital visits

• Lost wages

• Funeral expenses and allowance to dependents 

Workers' compensation insurance is expensive, and your pocket might find it painful. Save money by getting pay-as-you-go workers' compensation insurance. 

This provides a monthly coverage and can be canceled anytime. Instead of annual revenues, premiums are determined through the monthly income of your business. You get this from Cerity and The Hartford. 

Commercial Auto Insurance for Home Based Businesses

Limits Of Commercial Auto Insurance for Home Based Businesses

Do you use your personal car to transport supplies and equipment or deliver goods and products? Know that your personal auto insurance won’t grant coverage. 

Commercial auto insurance provides a comprehensive shield for all exposures that might happen while you’re using a vehicle commercially. You can use this insurance to:

• Cover the medical treatment of persons who sustained property damage or bodily injuries from a vehicular accident you caused

• Take care of repair and replacement expenses if your vehicle sustained damage because of fire, theft, vandalism, lightning, weather, collision, and other covered perils

• Cover your medical treatment and the passengers as well if your car got involved in an accident caused by an uninsured/underinsured driver

• Get reimbursement for public transportation and vehicle rental while your car is with the mechanic

• Cover the replacement cost of a trailer or any other equipment attached to the car

All states in the USA require a specific amount of commercial auto insurance for bodily injuries and property damage from an accident you cause. For example, if in Georgia, your commercial auto insurance must provide a liability coverage of $25,000/$50,000/$25,000. 

Cyber Liability Insurance for Home Based Businesses 

Cyber liability insurance is useful if you’re an independent home based software developer, web developer, or app developer. Consider getting $2 million worth of cyber liability insurance. 

IT work involves collecting and processing the data of third parties such as credit card information, phone numbers, address, and others. You’re responsible if such information leaks in the inconvenience of affected parties. 

Cyber liability insurance will help you cover costs if a claim is filed after a data breach happens due to a cyber attack, cybersecurity error, or employee negligence. You can use this insurance to:

• Cover public relations costs to inform clients of the breach

• Pay for professional services to contain the breach and recover lost data 

• Cover lost revenues if you need to stop working to contain the breach

• Account for defense costs and court judgments if affected parties decide to sue

Home Based Bakery Insurance

Home based bakery insurance is a specialized insurance program for home bakers that manufacture cakes, cookies, and other goodies. Several insurance companies offer this. Examples are Thimble and FLIP Program. Policies you can get are general liability, professional liability, and commercial property insurance.

Home Based Business Insurance Cost

As a home based business, expect to pay $25 per month or $300 per year for a $1 million general liability insurance. This home based business insurance cost estimate assumes that you have 5 employees and make $500,000-$750,000 per year.

Be smart in deciding who you work with. Here’s a table showing the rates of insurance companies you might want to consider:

Selecting the best home based business insurance policy is sometimes hard. However, by clicking the 'Get Quotes' button below and completing the form, you will be able to easily compare countless home based business insurance quotes and coverage options online from the best home based business insurance companies in America!