Is Your Home-Based Business Protected from Risk?


As people are looking for ways to save money and find a greater sense of work-life balance, home-based businesses are becoming more and more popular, especially as job stability and reliable childcare have been affected this past year.

The Appeal of a Home-Based Business

We get it, there can be a lot of perks to working from home, including: 

  • No commute
  • More cost-effective than renting/leasing office space
  • Reduces or eliminates the need for child care
  • Tax deductions (including a portion of your property taxes, utilities, repair and maintenance, property insurance, and mortgage interest)
  • You get to be your own boss

Common Types of Home-Based Businesses

The options are endless for the type of business you choose to run from your home, but we most commonly see: 

  • Network marketing companies 
    • Young Living, Monat, Tupperware, etc.
  • Accountants 
  • Realtors 
  • Mortgage Brokers 
  • Insurance Brokers 
  • Massage Therapists 
  • Chiropractors 
  • Estheticians 
  • Web Designers 
  • Party Planners 
  • Caterers 
  • Woodworkers & Carpenters
  • Day homes
  • And so many more
Home office with wooden bookcase and classic desk- 3d rendering

The Catch

It is appealing, but there’s a small catch. Your business isn’t covered under your home, tenant or condo insurance. However, an amendment can likely be added to your existing policy to protect you from business-related risks and it’s generally pretty affordable.

For example, if a client or a courier came to your home for business purposes and injured themselves—you would not be covered under your home policy. Or your house floods and your computer and electronic equipment is drenched—you would not be covered for the replacement. Alternatively, a customer buys an item you made and injures themself using it—you would not be covered for legal fees.

To ensure you’re covered, add a home-based business endorsement to your insurance by calling Costen today. Our friendly brokers can help find you the best option for your unique circumstance.

What’s Covered

A Home-Based Business (HBB) endorsement can often be added to a homeowner’s, tenant or condominium policy. Most of the HBB endorsements have the following requirements:

  • The business is operated out of the insured’s home
  • The business is operated by up to two people
  • The business occupies less than 50% of the home
  • The business has gross receipts no greater than $75,000 per year
  • The business has Canadian operations only

Depending on the type of the business, or if it does not fit the above criteria, then it would be insured through a separate commercial policy.

The HBB endorsement will provide the following types of coverage:

  • Business property on-premises
  • Business property off-premises
  • Accounts receivable
  • Valuable papers
  • Money
  • Credit/bank cards
  • Extra expense
  • Business interruption
  • Liability (personal liability, advertising injury, product and completed operations, and off-premises)

An HBB endorsement usually classifies eligible businesses into three categories, including Office and Office Services; Sales and Crafts; and Other and typically costs between $200-300 per year.

If you have any questions regarding the above information or to ensure that your property and Home Based Business are adequately insured, please contact one of our knowledgeable Brokers who would be more than happy to assist you.