The answer depends on the specific operations and risks of your at-home business. While there may not always be a legal requirement for an at-home business to carry insurance, having the right coverage is generally a good idea to protect against potential liabilities and financial losses.

Many business owners assume their homeowners insurance will automatically cover business-related risks. However, homeowners policies may provide limited coverage—or no coverage at all—for certain business activities. Depending on how your business operates, additional insurance may be necessary.

What Types of Insurance Might an At-Home Business Need?

General Liability Insurance

General liability insurance can cover claims involving bodily injury, property damage, and personal or advertising injury arising from your business operations.

For example, if a client visits your home for a business meeting and is injured on your property, your business could potentially face a liability claim. General liability insurance can help cover legal defense costs, settlements, and judgments associated with a covered claim.

Homeowners insurance

If your at-home business involves activities that could increase the risk of damage to your home or property, your standard homeowners insurance policy may not provide adequate coverage.

This could include businesses that use certain chemicals, store business equipment or inventory, or regularly host clients at the home. Depending on your operations, you may need additional coverage or a separate business insurance policy to properly protect against these risks.

Business Personal Property Insurance

Business personal property insurance helps protect the physical property your business owns and uses in its day-to-day operations. This can include computers, equipment, furniture, tools, supplies, and inventory.

For an at-home business, it’s important not to assume that all business equipment will be fully covered by a homeowners insurance policy. If business property is damaged or destroyed by a covered event, such as a fire or theft, business personal property coverage may help cover the cost to repair or replace those items.

The amount and type of coverage needed will depend on the property your business owns and how essential that property is to your daily operations.

Business Interruption Insurance

Business interruption insurance can provide financial protection if a covered event disrupts your business operations.

This coverage may help replace lost business income and cover certain extra expenses caused by the disruption. For an at-home business that relies heavily on its home workspace, this coverage can help the business maintain financial stability following a covered loss.

Every At-Home Business Is Different

In addition to these types of insurance, an at-home business may need other coverage depending on its specific operations and risks. The insurance needs of a freelance consultant may be very different from those of an at-home bakery, online retailer, or contractor.

At-home business owners should carefully review their insurance needs and speak with an insurance professional to make sure they have the appropriate coverage in place.

Understanding your risks before a loss occurs can help protect both your business and the work you’ve put into building it.

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