I ran a business out of my destroyed home

Many Californians operate businesses out of their homes. Maybe you give music lessons, provide childcare, or operate a landscaping business. Maybe you even have a separate office, but work from home often enough that you leave important items, like computers or printers in your home. If you are one of the many people who operate a home business or work from home, it is extremely important to be aware of what your homeowner’s policy may or may not cover and to determine whether you have any additional coverage.

Most typical homeowner’s policies provide only limited protection from losses to your home business. In fact, operating a home business is sometimes a violation of your homeowner’s policy.  Luckily, many home business owners purchase a rider or add-on to their homeowner’s policy to specifically protect their home business. Riders provide only limited coverage, as they typically cover property losses up a certain amount and are often purchased by home business owners who don’t have employees and only possess a limited amount of equipment.

If you suffered a loss of a home business, and your homeowners insurance is not enough to cover it, you may consider whether your broker is at fault for failing to provide you the insurance you requested -- as long as you specifically told them you ran a home business and that you needed specific coverage.  Further, if you used some of the business property for non-personal use as well, you may be able to get it covered as if it was personal property.

You may also have a separate Business Owner’s Policy (BOP) in addition to your homeowner’s policy. BOP policies provide more comprehensive coverage for your business than a homeowners policy.  If you frequently conduct business meetings with others in your home, you have multiple employees, you produce a product out of your home, you operate a landscaping business and store your equipment at home, or if you operate a child care facility, a BOP provides comprehensive protection to your home business.  Not only are you likely insured for property damage and loss, but a BOP typically will provide for loss of income resulting from business interruptions.

If you are unsure if you have the right coverage, check your policy.  If you have only a standard policy, look for riders and endorsements that specifically address these kinds of items.  You can review our article on how to read your policy to help guide you through the process.  You can also call your insurance company or broker to inquire about any additional insurance for these purposes you may have purchased.