A home baker in Winter Garden sells custom cakes through social media, with customers picking up orders at her front door. One rainy Saturday, a customer slips on the wet porch steps, breaks her wrist and, a few months later, files a claim. The baker assumes her homeowners policy will handle it, the way it would if a neighbor had fallen while visiting. It does not. The customer was there because of the business, and homeowners liability coverage excludes injuries that arise from business activities. The mixers, the display case and the supplies in the garage turn out to have only a small limit under the policy as well.
Running a business from home is common across Florida, from consultants and bookkeepers to photographers, online sellers, home bakers and contractors who run the office from a spare bedroom. A homeowners policy protects the house as a residence, not as a place of business, and the gaps show up in liability, business property and lost income. Closing them is often less costly than people expect, especially when the coverage is shopped across several carriers.
What Your Homeowners Policy Does Not Cover
A standard homeowners policy treats a business in the home very differently from your personal life. Liability coverage excludes injury and damage arising out of business activities, so a client, customer or delivery driver hurt on the property because of your business may not be covered at all. Property used mainly for business, such as computers, cameras, tools, equipment and inventory, falls under a small special limit inside the personal property coverage, commonly a few thousand dollars at the home and less away from it.
Lost income is the third gap. When a covered loss such as a fire makes the house unlivable, the homeowners policy may pay for somewhere to live, but nothing in it replaces the business income you lose while you cannot work. For a business that depends on the home as its kitchen, studio or office, that can be the largest part of the loss.
Exposures a Homeowners Policy Was Never Built For
Several business exposures have no place on a personal policy at all. Professional mistakes, such as bad advice, an error in someone’s books or a missed deadline, are never covered by homeowners insurance, wherever the work is done. Products you make or sell, from baked goods to handmade items to imported goods sold online, carry product liability exposure that a homeowners policy excludes. Our article on product liability for online sellers explains how that exposure works even for small sellers.
Customer data and payment information carry cyber exposure, often with less security than a business office would have, which we discuss in why small businesses are real cyberattack targets. And a personal auto policy can deny a claim when the car is being used for business in ways the policy does not allow, such as regular deliveries.
Three Ways to Close the Gap
For a very small business with modest revenue, no employees and few or no visitors, some carriers offer a home business endorsement on the homeowners policy. It raises the business property limit and adds limited business liability. It is the simplest fix where it is available, although terms and eligibility vary by carrier and many Florida homeowners carriers do not offer it.
For a business with real revenue, clients or customers visiting, inventory or valuable equipment, a business owners policy is usually the better answer. It combines general liability, business property and business income coverage in one policy, and it can often be written for a home-based operation, though carriers may set limits on revenue, employees or visitors. Our guide to what a business owners policy is explains how the pieces fit together. Equipment that travels to job sites or shoots can be covered on an inland marine policy, which follows the equipment rather than the address.
The third piece covers what neither a homeowners policy nor a business owners policy handles fully. Consultants, freelancers, designers and other service providers need professional liability, and any business handling customer data should consider cyber coverage. Businesses that use vehicles for regular business driving may need commercial auto.
Employees Change the Picture
Once a home-based business has employees, workers’ compensation becomes part of the conversation. Florida generally requires it for non-construction businesses with four or more employees and for construction businesses with one or more, and it protects the business as well as the worker. Employees who come to the home for work, or who work from their own homes, also raise liability and workers’ compensation questions that are worth settling before something happens rather than after.
If you are a remote employee working from home for someone else’s company, your situation is usually simpler. The employer’s equipment is generally the employer’s to insure, and the work is not your own business. It is still worth asking your employer what its policies cover at your home workspace, and if you also freelance or run a side business, that part needs its own coverage. Renters face the same gaps as homeowners, often with even less room in the personal policy for business property.
Local Rules and HOAs
Florida law limits how cities and counties can restrict home-based businesses that keep a residential appearance, but it does not override a homeowners association’s covenants. Those covenants can still restrict signs, client traffic, deliveries, parking and certain kinds of business. Before you start seeing customers at home, check your HOA documents as well as any licensing your business type requires, since a violation can create problems that no insurance policy solves.
How to Decide What You Need
Start with an honest look at the business: your revenue, whether anyone comes to the home for business, what equipment and inventory you keep there, whether you handle customer data or payments, whether you have employees and how you use your vehicles. A very small operation with no visitors and little equipment may need only an endorsement. A business with real revenue, visitors, inventory or employees needs a business policy built around its actual risk, not a homeowners add-on stretched to fit. If you are just getting started, our article on choosing the right business insurance for a Florida startup walks through the first decisions.
Worth Confirming With Your Agent
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Whether anyone comes to your home for business, such as clients, customers or contractors
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What equipment and inventory you keep at home, and what it would cost to replace
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Whether you make or sell products, give professional advice or handle customer data
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Whether you would lose income if a fire or storm shut your home down for months
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Whether you have employees, and whether you use your vehicle for regular business driving
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Whether your HOA rules allow the business activity you run from home
This article is general information and is not legal advice.
Talk to Prestige Insurance Group
Prestige Insurance Group writes both personal and business coverage across Florida, which makes it easier to see where a homeowners policy stops and a business policy needs to begin. If you run a business from home and are not sure your current coverage reaches it, we can review what you have and compare options from carriers that write home-based businesses.
Call the office nearest you. Se habla español.
Orlando: 407-993-2331
Miami: 305-969-8776
Stuart: 772-247-3788
Prestige Insurance Group, License L057894
