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When Does Your Home Business Require Insurance?

Many Canadians operate businesses out of their homes. What they may not know is that there are exposures that go along with these businesses, no matter how small. These exposures may not be covered by their homeowner’s or renter’s policy. Your homeowner’s or renter’s policy is intended to protect your personal interests only. Therefore, any exposure relating to a business is not intended to be covered by the policy.

These exposures could be anything from a UPS employee delivering a business package to your home, to a personal training client injuring themselves in your home fitness studio. Both scenarios would not be covered, which is why you would require business insurance. The amount of your sales doesn’t matter. The amount of loss you could face should something go wrong does matter.

So how you can you properly protect your home business? This would depend entirely on the type of business you are operating. It’s important that you inform your HMS broker of your business so we can arrange the correct coverage one of two ways:

(1) Add an endorsement or rider to your homeowner’s or renter’s policy

Depending on your type of business and its operations, you might be able to add a relatively inexpensive (i.e. $50 to $200 a year) endorsement or rider onto your homeowner’s or renter’s policy, providing you with liability and business content coverage.  This type of insurance may be appropriate for a one-person business without a lot of valuable equipment or many business-related visitors. This business is also unlikely to suffer a major loss if unable to operate for a while as a result of fire or another disaster. Such coverage may work for some of the following businesses:

Eligable Businesses For This Coverage

  • Accounting
  • Insurance adjuster
  • Advertising agency
  • Antique gallery/shop
  • Art teachers
  • Baked goods
  • Barbour supplies
  • Bed & Breakfast
  • Catalog or mail orders
  • Ceramics
  • Clowns, magicians and entertainers
  • Craft sales
  • Financial planning
  • Floral arrangements
  • Interior decorating
  • Mortgage broker
  • Music teacher
  • Pet grooming
  • Photography
  • More…

(2) Business Insurance policy

Business policies provide more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. In addition to protection for your business property, most policies reimburse you for the loss of important papers and records, accounts receivable and off-site business property. Some will pay for the income you lose (business interruption) in the event your home is so badly damaged by a fire or other disaster that it can’t be used for a while. They’ll also pay for the extra expense of operating out of a temporary location.

If your home business operates in more than one location, has several employees, a large value of business contents, and doesn’t fit into the narrow eligibility for a homeowner’s endorsement, then you may require a business policy. Every business situation presents its own unique situations, so it’s important that an HMS broker review your business so we can correctly insure it.

Looking for a homeowner’s or tenant’s quote? Get an online quote!

What about a business quote? Get a HMS broker to contact you!