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Homeowners vs. Commercial Policies


Homeowners policy won’t cover your business.

It’s the new American dream—working from home. However, home-based businesses face risks, too. They need commercial insurance coverage like any other business, as homeowners or auto insurance won’t cover common home-based business risks.

Here are just a few risks:

Did you hear the one about the delivery person?

Any injury that occurs in the course of business is not covered by homeowners insurance.  For example, you can be liable if delivery people injured while making business-related deliveries.

Or if a customer trips walking up the sidewalk to your home-based computer repair shop and breaks a hip, your homeowners insurance won’t cover injury expenses.

Business property

Imagine a customer coming to pick up their order, she slips and fall and her cell phone broke. Did you know you are responsible for her injuries and for the damaged property?  And if a tree crushes the customer’s car parked in your driveway, you’re responsible for those damages, too.

Your homeowners insurance won’t just deny coverage for damage to another’s property relating to your business operations—it also won’t protect your business property, such as computers, printers, and devices, from theft or vandalism.

Furthermore, if that tree falls on your home, causing damage, your insurer will repair your home and most damage to it—but not your business property. This may not mean much for some home businesses, but it could sink those with expensive supplies and equipment.

Liability loopholes

Here is an example, aside from showing properties, real estate agents who primarily work from home are actually running a home-based business. If you drive on company business you will need commercial auto insurance. Even if the business makes minimal deliveries, regular auto insurance won’t cover business-related losses.

Denying that you run a home-based business is not the answer. If you cause an accident, injuring other drivers and damaging their cars, your personal auto insurance won’t provide coverage. And some insurers may cancel your policy because failing to inform them of vehicle-use type is fraudulent.


When you are in the car with your customers and get injured in an accident in your car, they aren’t covered. Without proper coverage, you’ll have to pay judgments or claims.

Any auto accidents are very expensive, especially when people are injured by your “business” vehicle. The ensuing lawsuit can be substantial.

If someone else hits you and doesn’t have insurance, or has insurance but not sufficient coverage to pay for damages, you’d face another issue.

When you are driving for business, have standard auto insurance, and are hit.

You’d better hope the other person is insured because you won’t be able to claim under your personal car insurance’s uninsured/underinsured motorists (UM/UIM) coverage.

Everything you own, including your business, could be at risk. But with commercial auto and business insurance, you’ll have the peace of mind you need to get on with business.