If you work from home as a freelancer or business executive, don’t make the mistake of thinking your home insurance policy will cover you.
Your home insurance policy covers your personal activities. It does not cover your professional activities, even if these are carried out on private premises (your house, condo or apartment).
Coverage for property used for professional activities is therefore very limited. The coverage limit is $2,000 if the property is damaged, destroyed or stolen following a loss.
Add up the value of your computer equipment, furniture, books, tools and professional instruments … and see how quickly the $2,000 limit is reached!
Coverage limited to 2,000$
Coverage for self-employed businesses lets you choose the insurance amount that corresponds to the actual value of the property you use for professional activities. In most cases, that value exceeds $2,000.
Some insurers consider coverage for self-employed businesses to be a separate document (endorsements) appended to the home insurance policy. For others, it’s a separate policy. In the latter case, you may be require to also have your home insurance policy with the same insurer, as you can’t have one without the other!
Insurance for home-based businesses doesn’t only cover your property. It also offers other coverages:
Coverage for damage caused to third parties (= your liability)
Please note! Liability covered under your home insurance policy only covers damage caused to third parties in the course of your personal activities. You need insurance for home-based businesses to cover damage caused to third parties in the course of your work.
Here are some examples:
Coverage for business interruption
This coverage will come in handy in the following instances:
Coverage for client accounts, valuable papers and records, and professional fees
This coverage is very useful in the following instances:
Depending on the nature of your professional activities, the insurer may decide that the risks are too high to be covered under your home insurance policy. In this case, the insurer will instead offer you business insurance.