Home-based business insurance will cover your equipment (i.e. computer, printer, food processor etc.,) and your business inventory whether it’s on or off-site.
Depending on the policy it may also include business interruption insurance if an insured loss occurs at the home.
Depending on the size and type of your home-based business, you may need to have a standard commercial insurance policy in place.
Ask your insurance provider for guidance if you’re starting or expanding your business.
WHAT TYPES OF HOME-BASED BUSINESSES CAN BE COVERED?
The short answer is probably “all”.
According to the Government of Canada (2020), Ontario is home to some 440,306 small businesses, which account for over 97% of ALL businesses in Ontario, many of these home based businesses.
Let’s take a look at some of the more popular types of home businesses.
HOME DAYCARE BUSINESS INSURANCE
Running a home daycare often requires the purchase and use of extra equipment like portable cribs and cots, change tables, security gates and toys.
Home-based business insurance will certainly cover these items.
However, the biggest insurance need for home daycare will be sufficient liability coverage.
Caring for children from outside the home carries with it significant risk so proper liability insurance coverage is a must for a licensed home daycare provider.
CATERING BUSINESS INSURANCE
While regular home insurance should cover the bulk of your food preparation equipment (i.e. kitchen stove, knives, bowls, storage containers etc,), it has its limits.
Home-based business insurance will cover any special equipment required above and beyond what you’d typically find in a regular kitchen such as commercial-grade ovens, cold food storage units, food processors and extra supplies.
Most significant, home business insurance can cover a caterer from liability risks and other insured losses such as:
- Customers getting sick by consuming food prepared by a caterer
- The caterers’ food delivery vehicle getting stolen or damaged.
- An employee or sub-contractor getting injured while on the job.
PET SITTING BUSINESS INSURANCE
While at first glance this may not seem like the type of business that would require much in terms of business insurance, after thinking about the potential scenarios a pet sitter can find themselves in, we realize how important it is to protect yourself and your pet sitting business.
First and foremost would be liability insurance coverage for your customer’s property, including their pets.
Liability insurance can protect you from events ranging from lost or stolen keys to the worst-case scenario involving an ill or deceased pet while in your care.
HOME OFFICE INSURANCE
What about those businesses that don’t require any special equipment, don’t carry obvious liability risk and don’t even have employees?
I’m looking at you bloggers, consultants, graphic designers, digital marketers etc.,
While your home insurance covers your computer, phone and printer, it does not extend to things like Cyber Liability Insurance.
If you’re responsible for hosting or maintenance related to your client’s files (i.e. websites), making sure you’re protected in the event of a malicious attack is critical.
DOES HOME INSURANCE COVER MY HOME-BASED BUSINESS?
You may be thinking “I have home insurance which I know covers the equipment I use at home for my business, why do I need home business insurance?”
This is understandable and a common question people have about home-based business insurance.
Although while it’s true that your existing home insurance or renters insurance likely covers your property and contents, home insurance often falls short of covering liability related to the business activity at home.
HOW MUCH DOES HOME BUSINESS INSURANCE COST?
While there is no standard pricing chart or exact formula to determine what a home business insurance policy would cost, there are certain factors that can give you a general idea.
- Type of business.
Different business types come with varying amounts of risk. The more risk (i.e. dangerous equipment, employees, frequency and distance of travel etc.,) the higher cost there will be for insurance.
- Amount of business.
The cost of home-based business insurance can vary even between the same type of business.If a business conducting significantly more business and bringing in more revenue than another, their insurance cost may be higher due to there being more opportunity for a loss.
- Experience of the owner.
A new business owner will often have a higher cost of business insurance compared to a more experienced owner.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.