Home-based businesses are rapidly growing in popularity as more people want to be their own boss. However, many of these entrepreneurs fail to recognize the importance of being properly insured. Sometimes they make the mistake of believing their homeowners policy is enough business insurance to cover their operations. Unfortunately, this is not the case, and the lack of protection can end up being costly in the event a liability claim arises or important business property is damaged or stolen. Here’s an overview of how a homeowner’s policy actually works for home businesses. 

A Guide to Homeowners Insurance & Home-Based Businesses 

What Coverage Does Homeowners Insurance Include? 

Some standard homeowners policies offer a very limited amount of coverage for home-based businesses, while others specifically exclude any kind of business-related activity. If yours does include protection for your business, it will generally only cover up to $2,500 in damages that occur on the premises and $250 in damages for anything outside of your home. 

Additional Coverage Options to Consider 

Homeowners insurance won’t cover any damage to business records or data, loss of income as the result of damage to the property, or liability claims. For this reason, it’s important to explore the different business insurance coverage options available.

business insuranceThe first is adding an endorsement to your homeowners policy, which will increase the limits for losses. This is the least expensive choice but is generally only adequate for one-man operations with little to no equipment or inventory.

The next is an in-home business policy. This will cover property and equipment, data recovery, income replacement, and some liability protection.

The last option is a business owners policy. This is designed to provide the most coverage and is usually best for small- to medium-sized home-based businesses as well as those with multiple locations. With this option, you’ll be set for when your company grows beyond the boundaries of your home.


If you run a business out of your home, reach out to MP Davis Insurance Agency for help determining the best way to protect your operations. They’ll review your current homeowners policy and evaluate your risks to see which coverage solution is most suitable for your situation. They’ve been providing reliable personal and business insurance policies to residents throughout Randolph County, NC, for more than 40 years. Call (336) 498-7606 to schedule an appointment or visit their website for more information on the products they offer.