The business landscape is changing, and more Americans than ever are working from their homes. About 43 percent of Americans work remotely at least some of the time.1 Of the small businesses in the U.S., about 50 percent are home-based.2

Running a business or working from home impacts your insurance needs. It’s important to learn about ways you can protect your home-based profession with home insurance and risk management.

Basic home insurance offers limited business property coverage

Most home insurance excludes coverage for business liability and offers only limited coverage for business property. Bill Wilson, founder and CEO of InsuranceCommentary.com, notes that many policies cover damage to business property owned or used by the homeowner for up to $2,500 on premises or $1,500 off premises.

If personal property, such as a laptop or tablet, is used for both business and recreation, your home insurance might apply differently, too. Wilson says coverage depends on the wording of the policy, but most policies limit coverage for items either used primarily for business or for any business purpose.

Understand what your home policy will cover so you can protect valuable business equipment.

What your employer’s insurance may cover

If you work remotely, your employer’s business insurance may not cover damage to property owned by the business. Wilson says most commercial property policies cover property only while on the business’s premises.

Your employer’s business liability insurance is a different story. Wilson says, “It usually extends to employees engaged in business activities throughout the ‘coverage territory,’ as defined by the policy.”

Consider home business coverage to address your business exposures

The kind of work you do from home will affect which coverage option is appropriate. If your operations are low risk – for example, if you work remotely in customer service or sales – you can usually add a home business endorsement to your home insurance policy. This option can increase business property coverage limits and address some business liability exposures such as lost income or coverage for inventory.

Manage your business risks

Aside from insurance, you can protect your home business with simple risk management techniques. Wilson suggests you:

  • Meet clients outside of your home. This reduces the chance that someone will be injured on your property, making his or her medical expenses your responsibility. Offer to meet customers or clients at their place of employment or another location. If you frequently ship and receive items, visit FedEx and UPS in person to limit foot traffic at your home.
  • Prevent losses. Outfit your home with alarm and surveillance systems to reduce theft, and keep valuables in a secure place. For example, if you're in sales and keep a laptop and samples in your office, make sure the room is locked when you're away.

When in doubt, call your insurance company to see what home business coverage fits your needs and whether your risk management practices qualify you for premium discounts. Review your homeowners policy regularly to learn about additional coverage that could benefit your home.