Home Based Business Insurance

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).