TL ; DR (3 Minute Read)
- Many Santa Ana entrepreneurs start with a side hustle at home, but a homeowners policy usually doesn’t cover business risks.
- Options include a policy rider, an in-home business policy, or a business owner’s policy (BOP).
- As your business grows, you may also need professional liability, workers’ comp, or umbrella coverage.
- Our team at Neighborhood Insurance Agency can help review your coverage so you know where you stand.
Why a Homeowners Policy Isn’t Enough
If you’re running a business from home — whether freelance work, online sales, or consulting — you may assume your homeowners or renters insurance has you covered.
Here’s the catch: those policies usually exclude business property and liability. That means if your equipment is stolen, or a client slips in your home office, you could be on the hook.
In fact, the Insurance Information Institute reports that about 40% of small businesses lack adequate coverage. For Santa Ana entrepreneurs, that can be a costly mistake.
Coverage Options for Home-Based Businesses
1. Rider to a Homeowners or Renters Policy
- Best for: very small businesses with limited equipment and no employees.
- Coverage amount: usually about $2,500 in business property.
- Cost: a few hundred dollars per year.
- Limitations: doesn’t protect against major disruptions, lawsuits, or high-value losses.
2. In-Home Business Policy
- Best for: freelancers or small businesses with up to three employees.
- Coverage includes: theft, loss of documents, or injury claims.
- Flexibility: some insurers let you increase coverage up to $10,000 for inventory or supplies.
3. Business Owner’s Policy (BOP)
- Best for: growing businesses needing comprehensive protection.
- Coverage includes:
- Property damage or equipment loss
- Customer injury liability
- Loss of income from business interruptions
- Professional liability claims
- This is the most common policy for small businesses ready to move beyond “side hustle” stage.
Other Coverage to Consider
Depending on your type of business, you may also need:
- Workers’ Compensation – required if you have employees.
- Professional Liability – for service-based businesses like consultants, designers, or legal professionals.
- Umbrella Policy – extra liability coverage if a lawsuit exceeds your standard limits.
Key Takeaway
If your Santa Ana business has outgrown the “side hustle” stage, it’s time to rethink your coverage. A homeowners policy won’t protect your tools, data, or liability risks.
Here at Neighborhood Insurance Agency, we help entrepreneurs like you choose the right protection at every stage of growth. No pushy sales, just honest answers to make sure your business stays covered.
Santa Ana, CA 92705
Frequently Asked Questions
Usually not. Business assets often need their own coverage.
A rider to your homeowners policy, though it offers limited protection.
If you need more than $10,000 in coverage or want broader protection for income and liability
Yes, especially if equipment loss or client lawsuits could impact your work.
Not always — many small business policies are affordable and customizable.
Absolutely! We’re happy to review your needs and explain options without pressure. Talk to us today!
Reference
Insurance Information Institute. (2024). Business insurance basics for small businesses. Retrieved from https://www.iii.org/publications/insurance-handbook/insurance-basics/small-business-insurance-basics
U.S. Small Business Administration. (2024). Insurance for small businesses. Retrieved from https://www.nsc.org/community-safety/safety-topics/child-safety/childproofing-your-home
