Does Homeowners Insurance Cover a Home-Based Business in Washington?

A standard homeowners insurance policy may provide some limited coverage for business property, but it may not adequately cover equipment, inventory, or liability associated with a home-based business. Depending on the type and size of your business, you may need an endorsement or separate business insurance policy.

A $6,000 Coverage Gap We Found Before the Claim

Recently, we reviewed the homeowners policy of a Washington woman who runs a sourdough business from her home.

She had spent years building the business, developed a loyal customer base, created a website, and invested thousands of dollars in equipment—including a commercial bread oven worth about $6,000.

Like many home-based business owners, she assumed that because the oven was physically located inside her home, it would be covered by her homeowners insurance.

It wasn't covered the way she thought it was.

Because the oven was being used for business purposes, different coverage considerations applied.

Fortunately, we discovered the issue before she had a loss. In her particular situation, we were able to add the appropriate endorsement to her homeowners policy.

Had we discovered the problem after a fire or other covered loss, the conversation could have been very different.

What Should Washington Home-Based Business Owners Do?

If you operate a business from your home, don't assume that everything inside your house is automatically protected by your homeowners policy.

Ask your insurance agent specifically about your:

• Business equipment and tools

• Inventory and supplies

• Business-related liability

• Customers coming to your home

• Equipment used away from your home

• Business income if a covered loss prevents you from operating

The right solution depends on the business and the insurance carrier. Some businesses may qualify for an endorsement to a homeowners policy, while others may need separate commercial coverage.

The Bottom Line

Before you have a claim, ask: "Does my homeowners insurance actually cover my home-based business?"

Finding out now could prevent a relatively small coverage issue from becoming a very expensive surprise later.

If you run a business from your home anywhere in Washington, call, text, email, or DM Tillett Agency. We'll help you understand what coverage you have, what you may be missing, and what options are available.