That’s a risky assumption.
The truth is, whether you’re selling handmade candles online or running a consulting firm out of your basement office, unexpected problems can derail your business in a heartbeat. Home-based business insurance exists to make sure those problems don’t wipe you out financially.
What Is Home-Based Business Insurance?
Think of it as a safety net designed for entrepreneurs who work from home. It can cover:
Property damage (your computer, inventory, or workspace).
Liability claims (a client trips on your front steps).
Employee injuries (if someone you hire gets hurt).
Lawsuits (from unhappy clients or business disputes).
Here’s the kicker: your homeowner’s policy usually won’t cover business-related losses. If you’re relying on it alone, you might be left footing the bill if something goes wrong.
Do You Actually Need It?
Ask yourself a few questions:
Do clients ever come to your home office?
Do you store inventory, supplies, or expensive equipment at home (or off-site)?
Do you keep customer records or sensitive data on your computer?
Would a fire, flood, or break-in force you to shut down your business?
Do you use your car for client meetings or deliveries?
Do you even have one part-time employee?
If you answered yes to any of these, your homeowner’s insurance probably isn’t enough. One accident, one lawsuit, or one disaster could put your business and your finances at risk.
What Can Go Wrong Without Coverage?
Without the right protection, you could end up paying out of pocket for:
Property damage or theft
Customer or client injuries
Employee injuries
Data breaches or cyberattacks
Lawsuits (and all the legal fees that come with them)
Even a small claim can add up quickly. Imagine replacing thousands of dollars in equipment after a fire, or covering medical bills after a client falls in your driveway.
Who Benefits Most From Home-Based Business Insurance?
You might not think of yourself as a “high-risk” business owner, but plenty of everyday professions benefit from coverage. For example:
Photographers and videographers
Accountants and bookkeepers
Web designers and IT consultants
Hairstylists, nail techs, or estheticians working from home
Online product sellers (Etsy, Shopify, Amazon, etc.)
Caterers, bakers, or small food businesses
If you make money from home, there’s a good chance you need some form of business insurance.
What Are Your Options?
You don’t always need a massive, expensive policy. Here are the main paths:
Add an Endorsement to Your Homeowner’s Policy
Some insurers allow you to add specific business coverage to your existing homeowner’s policy. This can work if your business is very small and low-risk.
Buy a Standalone Home-Based Business Policy
If your business is larger, has employees, or keeps significant inventory or equipment, a separate policy offers broader coverage and higher limits.
Consider a Business Owner’s Policy (BOP)
A BOP bundles general liability, business property insurance, and business interruption coverage often at a lower cost than buying separately.
You can also layer on other protections, such as:
Professional liability (errors & omissions) – protects against mistakes in your work.
Commercial auto insurance – covers business-related driving.
Workers’ comp – pays for employee injuries.
Cyber liability – protects against data breaches and hacks.
Umbrella coverage – adds an extra cushion above other policies.
How Much Does It Cost?
On average, a Business Owner’s Policy (BOP) runs about $57 per month — but costs vary depending on:
Your industry and risk level
How much equipment or inventory you own
Whether you have employees
Where you live
Coverage limits and deductibles
In other words: a solo consultant might pay far less than a caterer with a full commercial kitchen at home.
The Bottom Line
Running a business from home is smart and cost-effective — but skipping insurance could leave you exposed. One accident, lawsuit, or unexpected disaster could erase years of hard work.
That’s why home-based business insurance isn’t just another expense — it’s a shield. It gives you peace of mind to focus on what you do best: growing your business.
Since 1922, McMahon Insurance Agency has helped protect families, homes, and businesses across NJ, PA, and DE. We’ve guided thousands of entrepreneurs through choosing the right coverage — and we’d love to help you, too.
