Generally speaking, homeowners insurance has limited coverage for home-based businesses. In most cases, it does not provide adequate protection for all the liability risks. A home-based commercial insurance policy will close the gaps in any standard Homeowners insurance policy so that you will be insured correctly and accurately.

The following insurance claim scenarios demonstrate why Home Business Insurance is not only a smart move, but a necessary one.

NJ Home Business Insurance Claim Examples

• Sarah operates a small Amazon business at home, while maintaining an ongoing inventory of $7,500. Should a fire destroy or damage that supply, Sarah’s Home Based Business policy will cover the losses up to her Business Personal Property limit.
  
  
• Tim runs a home based business with many customers stopping in throughout the day. If one patron would slip, fall and incur injury, the Home Based Business policy would cover liability that is excluded under his standard Homeowners policy.
  
  
• If Sharon’s laptop computer is stolen while she is away from home on a customer call, the Home Based Business policy that Sharon has in place will provide up to $5,000 in replacement funding.

RELATED: Commercial auto insurance for the home business

• Bob’s home based business entailed him to work at a trade show on occasion. If someone should trip and fall over his display at such a time, the Home Based Business policy would step in to provide the liability coverage that his Homeowners policy would not (as this is categorized purely as a business episode).
  
  
• John owns a Home Based limited Liability Corporation. If a power surge damages his computer, telephone and fax machine, the Homeowners policy will not cover it because the property is under the LLC ownership. The Home Based Business policy, however, will pay for the damaged equipment replacement.
  
  
• Pat operates a home based business. If a fire should damage the premises to the extent that her business can no longer function as it should, the Home Based Business policy will cover her for loss of income and added expenses.
  
  
• Michael’s home is also home to his commercial bakery. If a power surge would cause a refrigerator system failure and subsequent food spoilage, repair costs and loss of income, the Home Based Business policy would cover the equipment breakdown and loss of business income.

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Summary: Though your home business can be both enjoyable and profitable, without a Home Business Insurance policy, your risk exposure could result in the possibility of significant and irreplaceable losses.