When you bought your home, your mortgage lender required you to purchase insurance to protect your investment. You bought coverage with the recommended limits. Then you started a small business in a spare room at the front. Nothing fancy – you’re a computer consultant so most of your work is done online although you occasionally meet clients at your home office.
You don’t do anything physical or dangerous with them but since other people are involved, you wisely increased your liability limits, just in case. Well, wouldn’t you know it, just after your best customer signed a big contract at your place, he trips over one of your kid’s toys on his way out. The resulting injuries, which involve broken bones, aren’t serious but require a stay in the hospital. He presents you with a bill amounting to thousands of dollars.
You think the liability coverage on your homeowners insurance will cover it because it takes care of injuries on your property. Unfortunately, your policy typically does not apply to people who visit your home for business purposes, such as vendors or clients. You’re stuck for the entire cost of the bill.
If you have a home business, at the very least, you need to add a home business rider to your insurance policy. It won’t cost very much but it may also have low coverage limits. If delivery people, clients, or employees visit your home, a wise course would be to buy small business insurance. This will take care of any issues related to your enterprise.