It’s a common misconception that your home insurance policy will cover your home-based business. But it was never intended to. A homeowners policy or any other type of personal insurance is personal in nature. Not only do you risk not being covered, but your provider might even cancel your insurance policy for withholding information.

What kind of coverage do you need, then? That depends on the kind of business you have.

Who needs a commercial insurance policy?

If you have a home-based business, you should have commercial insurance. It’s probably the last thing you want to spend your hard-earned money on, but failing to tell your insurance professional about your home-based business can have some dire consequences.

The provider may refuse to pay if you have a claim, and even if they do cover the claim, the amount of coverage provided for business equipment on your policy is minimal. Do you have any inventory, professional equipment or expensive computers? You’ll want to get specific coverage for those.

If you sell a product or give advice, you’ll need special liability coverage. And if you have employees or customers visiting your home office, you’ll need commercial general liability, too.

The good news is that commercial insurance adapts to the needs of every business. There’s even an affordable product designed for small businesses: the business owners policy (BOP).

What’s a BOP?

Bundled at a reduced premium, BOPs include coverage for a company’s most pressing needs: liability in case clients are injured or incur property damage, property insurance for the office and its business contents, and business interruption coverage. The purpose of a BOP is to help you overcome catastrophic events and liability lawsuits so you can keep fighting the good fight.

According to the Insurance Information Institute, a quarter of American small businesses never reopen after a major disaster. But if you have a BOP, you’ll receive money to pay your current bills, cover payroll during repairs and replace lost equipment and inventory, too. That will help you protect the business you’ve been working so hard to grow.

What else do you need?

Commercial insurance also has a number of nifty policies and endorsements to cover the specific needs of your business, such as:

• Professional liability (errors and omissions) for professionals giving advice or producing work that others rely on
• Product liability insurance if you sell products
• Commercial auto insurance if you use your vehicle for business purposes
• Advertising injury, if your trade exposes you to libel or slander that may harm your brand’s reputation

Need help or have questions about your home-based business and insurance? Reach out to your insurance broker. They’ll be glad to assist you.