6 Critical Reasons to Insure Your Home-Based Business


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6 Critical Reasons to Insure Your Home-Based Business


If you own a home-based business, you'll know there are plenty of considerations and decisions to be made. You might be wondering about whether your home-based business in Edmonton needs a business license or permit

Another major question to be answered is whether your business needs business insurance. If you've been running a home-based business for a while now, the thought of mishaps could be starting to weigh on you. Every business has the potential for major expenses and losses due to unforeseen circumstances. Home-based business insurance is an important step to make to ensure your business, home, and investments are protected.

Home-based business insurance is different than typical business insurance. There are a few options depending on factors like what type of business you run, who is coming and going, and the value of equipment or product you store at home. It's important to get in touch with an insurance professional to understand what your risk level is, and what your options are. 

Not insuring your home-based business comes with a variety of risks. Just a handful of reasons you should insure your home-based business incude:

1. Liability

The number one reason home-based businesses in Edmonton seek insurance is due to the potential for liability. Accidents and incidents can happen at any time, in any business. A client or employee could slip and injure himself/herself, or your products or services could unintentionally cause harm. We always hope our clients won't need to exercise their insurance in a claim, but we feel better knowing that if they do, they won't suffer irreversible damage to their businesses.

2. Mishaps cost a lot

Chances are that your home business won't survive a mishap. Water and fire incidences can be costly. Your amount of sales and revenue doesn't matter much, because a single incident can easily cost tens of thousands of dollars - a cost almost no small or home-based business can survive.

3. You could be personally liable

If your home-based business isn't incorporated, you could be held personally liable for any damages or claims against your business. Sole proprietors and entrepreneurs make up the bulk of home-based businesses, and without that legal separation between your company and your business, you risk being personally sued for incidents.

4. Peace of mind for your clients

Depending on what you do, clients could have a vested interest in whether you have proper insurance. Some clients may even request insurance records before awarding projects. Knowing they're protected in the event of a mishap will give your clients peace of mind, and potentially be the deciding factor in whether or not they place their trust in you.

5. Protection against interruptions in work

Uninsured assets are at risk in a home-based business, but you can also protect your income with various insurance options. In the case of an accident, or if something were to happen to your home to prevent continuing your business, interruption insurance ensures you can still pay your bills and make a living.

6. Coverage for Errors and Omissions

Depending on what types of products and services you offer, you may also need errors and omissions insurance, which protects you in case your services cause harm to another business. For example, if you're a consultant and offer advice that unintentionally harms another business, you may be at risk of a lawsuit.


Questions you might be asked by an Edmonton insurance broker for a home-based business insurance quote include:

  • How much equipment and merchandise do you store at home, and what is the estimated value?
  • Do you have home or content insurance?
  • Does the business equipment or product travel with you to other locations?
  • Do you have clients and/or employees coming and going from your home?

Whether or not you're going to purchase home-based business insurance, it's very important to disclose your home-based business to your home insurance broker or insurer. If you don't, you risk your home insurance failing to extend to your business supplies and equipment if your home is damaged.

Do you run a different type of business in Edmonton? Learn more about comprehensive business insurance options to minimize risk, or call our brokers to have all your insurance questions answered personally.

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