Can You Insure a Home-Based Business Property?

Running a business from home offers flexibility, convenience, and lower overhead costs. But it also introduces risks that your standard home insurance policy likely does not cover. If you store inventory, use expensive equipment, or meet clients at your residence, you may need extra protection to avoid unexpected gaps in coverage.

You might think about this the next time you bring on new equipment, expand your product line, or turn a side hustle into a full-time operation.

Why Home Insurance Alone Isn’t Enough

Home insurance is designed to protect your personal belongings and liability—not commercial activities. Most standard policies limit or exclude:

Business equipment above a low value threshold (often under $5,000)
Inventory or products stored on-site
Liability arising from client visits or deliveries
Loss of income from interrupted business operations

Using your home for business without disclosing it to your insurer may even void your policy.

How to Insure Your Home-Based Business

There are a few ways to secure proper coverage for your home-based operations:

Home-based business endorsement
An add-on to your existing home policy. It increases coverage for business contents and may offer limited liability protection. Ideal for low-risk businesses.
Standalone business property insurance
A separate commercial policy that covers business tools, inventory, and liability. This is recommended for higher-value operations or those involving clients or shipping.
Commercial general liability (CGL) coverage
Often added when client interaction is regular. Protects against lawsuits from third-party injuries or property damage related to your business.

Type of Coverage	Best For	Included Protections
Home business endorsement	Low-risk, home-only businesses	Basic equipment, limited liability
Standalone business property policy	Businesses with inventory or client interaction	Equipment, inventory, full liability options
CGL coverage	Those meeting clients or working off-site	Legal costs and settlements for injuries

Tip: Make a detailed list of your business property—including electronics, furniture, tools, and products. This helps assess your insurance needs and makes claim filing easier if needed.

What to Watch Out for with Home-Based Coverage

Home-based business policies can be very specific in what they cover. Some limit the number of clients you can host in a day, while others exclude higher-risk services like child care or food production. Your insurer may also restrict coverage if your business has employees who work from your residence. Understanding the fine print ensures you are not caught off guard when you need protection the most.

Note: Insurers may request documentation of safety measures like fire extinguishers, separate entrances for clients, or appropriate licensing, depending on the nature of your business.

When to Upgrade Your Coverage

You should review your insurance if:

You’ve grown your business and added equipment or inventory
You’ve started shipping products or storing materials on-site
Clients are visiting your home for meetings or services
You rely on your business income and can’t afford interruption
You’re applying for a business license or loan requiring proof of insurance

Caution: Assuming your home insurance covers your business can be a costly mistake. If a fire, theft, or liability issue occurs, your insurer may decline coverage if they weren’t informed of your business use. Always speak with your provider to disclose your operations and explore the right coverage for your setup.

Running a business from home doesn’t mean skipping out on risk management. With the right insurance in place, you can focus on growing your business knowing your tools, income, and hard work are protected.