Do I need business liability insurance for my home business?

Question:  Do I really need to get business liability insurance for my home business? 

Answer:   Yes …     

1. Your homeowner’s insurance probably does not cover liability (getting sued for someone getting damaged or hurt) from a home business.  Actually, it may expressly exclude it.  Sometimes you can add a rider, but that only will provide a small amount of coverage. 
2. If your homeowner’s insurance company finds out that you are running an uninsured business out of your home, they may drop your coverage (or decline to renew) at the next review period.  Not only is that uncool because your coverage is dropped, it may be difficult to get coverage from any company (because you have to disclose that you were dropped). 
3. If someone sues your business, you have to pay for a lawyer to defend you (even if you did nothing wrong).  That in and of itself may put you out of business. 
4. If someone sues your business, you are personally liable — and if you are incorporated or an LLC, you may still be personally liable if they "pierce the corporate veil" because you did not observe corporate formalities, were not adequately funded, or for other reasons. 
5. If someone sues your business and you loose, your business probably goes under, unless it happens to be able to afford both legal fees and the judgement. 
6. If your house burns down, or you are robbed, you don’t have coverage for your business assets. 

Business liability insurance is not that expensive, in the world of liability insurance, especially since you are not covering real property.  You should discuss with your insurance agent, insurance broker, or attorney exactly what coverage you need, which may include business liability, errors & omission, employee liability, business automobile insurance, among others. 

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