Your homeowners policy has a "business pursuits" exclusion that limits or excludes coverage for business equipment, inventory, and liability arising from business activities. If you run any business from home — even a side hustle on Etsy — you may have a dangerous gap.
What's at Risk
- Business equipment: Computer, monitors, printer, specialized tools — limited to $2,500-$5,000 under homeowners
- Inventory: Products, supplies, materials — often excluded entirely
- Business liability: Client injured visiting your home, product liability, professional errors — NOT covered by homeowners liability
- Business income: Lost revenue if a covered loss shuts down your business — not covered
- Data/cyber: Data breach, hacking, client data loss — not covered
Solution 1: Home Business Endorsement ($50-$200/year)
Best for: Freelancers, consultants, small online businesses with no clients visiting
- Increases business equipment coverage to $5,000-$10,000
- May add limited business liability ($300,000)
- Covers some business income loss
- Quick and affordable addition to existing homeowners policy
- Limitations: Low coverage limits, may not cover all business types
Solution 2: In-Home Business Policy ($200-$500/year)
Best for: Businesses with some clients visiting, moderate equipment/inventory
- Broader coverage than an endorsement
- Higher equipment and inventory limits ($10,000-$50,000)
- Business liability coverage ($500,000-$1M)
- Business income / interruption coverage
- Standalone policy — doesn't affect your homeowners
Solution 3: Business Owners Policy — BOP ($500-$2,000/year)
Best for: Serious businesses with employees, significant revenue, client-facing operations
- Commercial general liability ($1M+)
- Commercial property coverage for equipment and inventory
- Business income / interruption
- Professional liability / E&O (for service businesses)
- Workers compensation (if you have employees)
Common Home Business Types and What They Need
- Freelancer/consultant (no clients visiting): Endorsement ($50-$200/year)
- Etsy/e-commerce seller: In-home business policy (product liability needed)
- Photographer/videographer: Equipment floater + business liability
- Tutor/music teacher (clients visit): In-home business policy (liability for visitors)
- Daycare provider: Specialized commercial policy (high liability exposure)
- Contractor (tools at home): Commercial policy with tools coverage
Don't Forget These Add-Ons
- Professional liability / E&O: If you give advice that could cause financial harm
- Cyber liability: If you handle client data (names, emails, payment info)
- Commercial auto: If you use your personal vehicle for business deliveries or client visits
Bottom line: If you do ANY business from home, your homeowners policy probably doesn't cover it. At minimum, add a home business endorsement ($50-$200/year). For anything more than a small side hustle, talk to an independent agent about a proper business policy. The cost is low compared to the risk of a denied claim.