Home Based Business Insurance

Home Based Business Insurance

Specifically designed with hustling, fearless entrepreneurs in mind, home business insurance covers the most common risks that you may come across when operating out of your home.

Zensurance - Home-based business owner

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Home Business Owner

Insurance for home-based businesses

When it comes to insuring your business, most home-based business owners make the mistake of assuming their home insurance covers their business activities. The reality is, that most homeowner’s policies exclude business-related claims. In some cases, your policy could even be void if your provider is unaware that you are conducting business from home.

At Zensurance, we know what makes your home business unique. With over fifty partners, we’ve helped more than 150,000 entrepreneurs protect their businesses with insurance policies customized to cover industry-specific risks.

Your homeowner policy is unlikely to provide coverage for any loss or damages resulting from business-related activities, leaving your business exposed to a significant amount of risk.

Specifically designed with entrepreneurs in mind, our home business insurance policy package protects against risks associated with operating a business out of your home, such as negligence or third-party injuries, across industries.

Different businesses have different risks; for example, a financial consultant won’t require the same type of coverage as an e-commerce company.

A comprehensive policy for your home-based business should cover the risks you are most likely to face. Those risks will vary by service, industry, and product; however, the following core coverages apply to most business owners:

  • Professional Liability Insurance, also known as Errors and Omissions Insurance, protects against claims alleging negligence, misconduct, or failure to deliver a service as promised. Professional Liability Insurance is essential for any business owner offering advice or service for a fee. It may provide legal expense coverage in the event of financial loss due to your negligence. For some professions (e.g., accountants, paralegals), Professional Liability Insurance is required to practice. All of our policies are association-approved.
  • Cyber Liability Insurance:  Cyber Liability Insurance could cover costs associated with cybercrime involving your technology systems and customer data.  If your data is compromised due to a cyber-attack (e.g., phishing, or hacking), Cyber Liability Insurance provides coverage for notification costs, legal expenses, and risk management fees.
  • Commercial General Liability Insurance, also known as ‘slip-and-fall’ insurance, protects against claims alleging third-party property damage or bodily injuries. It may seem like an unnecessary form of coverage, considering you conduct business from home, but consider the delivery person who causes property damage at a customer’s home or the client who slips on your steps while visiting. CGL may provide financial coverage for both medical and legal fees if you or your business are named in a lawsuit.
  • Product Liability Insurance: Often included in CGL policies, Product Liability Insurance provides coverage for property damage or bodily injury due to a product you sell, manufacture, or distribute. For example, you operate a micro-bakery from your home kitchen, and a client sues you claiming a cake you sold them caused food poisoning. Product Liability Insurance typically covers damages caused by design, manufacturing, and marketing defects. If you plan to sell your products online or ship outside of Canada, be sure to check with your broker to see which areas are covered by your policy, as additional coverage may be necessary.
  • Commercial Property Insurance: Much like CGL, it may not occur to business owners operating from home that they need Commercial Property coverage (home business contents insurance). After all, isn’t that why you have home insurance? Most home insurance policies don’t cover damage, loss, or accidents due to business-related activities. For example, if your laptop is stolen, it may not be covered as home insurance typically excludes business property. Commercial Property Insurance doesn’t just protect a physical location; it protects your business’s most critical physical assets, including equipment, technology, stock, and inventory. Most home insurance policies don’t cover business-related claims, making Commercial Property Insurance crucial for your home and business.Please note, you must inform your insurance provider if you have pivoted to working from home. If your house burns down and you didn’t alert your insurance broker that you were using your home for business purposes, you may find your home coverage void.
  • Equipment Breakdown Insurance: From computers to industrial-grade machines, Equipment Breakdown Insurance covers the cost of repairing or replacing equipment damaged due to an electrical or mechanical breakdown. Not to be confused with Commercial Property Insurance, which covers loss or damage due to an insured event (e.g., fire, theft).

On average, a small business owner operating from their home can anticipate premiums starting at $450 per year for liability insurance with a $2M limit.

Insurance companies consider several factors when determining your premium, including:

  • Annual and Projected Revenue
  • Industry and Profession
  • Services and Products Offered
  • Training and Years of Experience
  • Claims History

We’ve partnered with over fifty insurance providers to offer you different options that suit your business needs at the best price.

Getting insured is quick and easy!

Complete our 5-minute online application for a free home business insurance quote.

Common claims scenarios

home business owner checking inventory in basement

Problem: The inventory you store in the basement of your home that you sell to customers is destroyed after a major rainstorm floods the basement.

Outcome: If you have overland flood insurance as part of your commercial property insurance, it may pay for flood damage repairs to your basement and replace the inventory you lost.

customer with malfunctioning tablet

Problem: A tablet computer you sold to a customer through your home-based business’s website overheats and burns the customer’s hands. They threaten you with legal action.

Outcome: Your product liability insurance may cover the cost to replace the faulty electronic device and pay the injured customer’s medical expenses.

guard dog at home

Problem: A courier delivery person is bitten by your dog while delivering inventory to your home.

Outcome: Your commercial general liability insurance may pay for the delivery person’s medical expenses. If they sue you for damages, it may also cover the cost of your legal defence and any compensation awarded to them by the court.

Frequently asked questions

What are the most common coverage that I should opt to include by business insurance policy?
Coverage requirements may differ for different industries. The most basic insurance policy that is applicable to almost all businesses is commercial general liability, which provides protection from third-party related risks. If you provide a service or advice, consider adding professional liability insurance to your policy. If you own expensive equipment and assets, consider contents coverage and equipment breakdown coverage. Legal expenses coverage may also come in handy if you require legal counsel or defense.
Does my homeowner’s policy cover disasters that occur due to business equipment failure?
Most homeowner’s policies do not cover any damages to your home that result from business-related activity and property, but go over your policy to ensure that it’s the case for you. For example, if you run a catering business and one of your equipment caused a fire to start at your property, any resulting damages may not be covered by your home insurance policy.
What is the difference between General Liability Insurance and Home Based Business Insurance?
General liability insurance is a specific insurance policy that covers injury and damage to third-parties, while home-based business insurance is an umbrella term that may include several different insurance policies such as general liability, professional liability, legal expense, contents coverage, etc, bundled into a package specially curated for businesses that operate out of the owner’s home.

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Running a business from home has a unique set of risks; you deserve a broker dedicated to providing you with the best coverage.

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