Home Business & Insurance?

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This is the second posting, as everyone who answered seemed to not understand what I was asking:

I am starting a home-based business in WV. I have obtained the required licenses in my state and have registered with the WV Secretary of State’s office.

There are no empolyees and almost all activity pertaining to the business is conducted elsewhere (at shows, flea markets, etc.) however a physical address was required to register the business, so I used my home address.

Question: What does this do to my homeowners’ insurance?

I will purchase a separate policy specifically for the business, so the liability aspect is covered. This question is ONLY about the homeowners’ insurance…

My policy right now clearly states that it is for residential only. A commercial policy is 3x what the residential costs. Does registering a business to my home mean that I must get a commercial policy?
Liability aside, say my house burns down. Will the insurance company say that they will not cover because I had a business registered to the address and the policy was for strictly a residential dwelling????

What do people with internet-based home businesses do? Are they required to purchase a commercial policy just because business is conducted at the home? My situation is very similar to this.

  1. Reply
    November 10, 2011 at 4:58 pm

    You are fine.

    The only thing would be that your homeowners insurance would not cover inventory or business assest if damaged or stolen from your home.

    A business policy will offer you liability protection and you can add coverage for your inventory/assets for not much more.

  2. Reply
    November 10, 2011 at 5:50 pm

    Well, it’s up to the homeowners insurer. Most, for that kind of business, as long as you have a seperate GL policy, will ask you for a copy of it, and happily keep writing your homeowners insurance. Some still won’t want to write your homeowners policy. It’s up to the individual companay, and their underwriter, to make that choice.

    No, having that business there does NOT “automatically” mean you need a commercial policy, with the type of business you have (no foot traffic, and no hazardous business property on site).

    Regarding your house burning down. The insurance company can decline to pay for any contents used for your business. I don’t think they flat out have grounds to deny the claim, assuming that they haven’t asked you if there was a business on the premises lately. If you don’t lie, you should be ok.

    Most people with internet based home business don’t worry about insurance. Most of the time, they don’t have a problem.

    The only time a problem happens, is when a claim is filed. MOST people, don’t have claims.

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