Describe the work as it really happens

Tell the agency what you sell, where the work occurs, and whether customers or delivery drivers visit. List the equipment or inventory kept at home, the people who work for the business, and how vehicles are used. A business name alone does not describe the risk.

Do not assume forming an LLC changes what an insurance policy covers. Business structure and insurance address different problems.

List the property that belongs to the business

Create an inventory of computers, tools, machinery, signs, samples, stock, customer property, and anything stored offsite or in a vehicle. Note the replacement cost and whether a loss would stop operations.

The U.S. Small Business Administration notes that home-based businesses may need an endorsement or business policy because a homeowners policy may provide only limited protection for business property and third-party injuries.

Trace how people and vehicles interact with the work

Customer visits, deliveries, hired help, and subcontractors can all change the insurance picture. So can using a personal car for business errands. The answers depend on the operation and policy, so describe the actual use.

Review the business whenever it changes

A new service, larger contract, employee, vehicle, leased location, or expensive piece of equipment can change what the business needs from its insurance. Review the policy at least annually and whenever the operation changes materially.

If a landlord, lender, customer, or vendor requires a certificate or specific limit, share the written contract with the agency early. A certificate documents coverage; it does not create coverage that the policy does not provide.

Keep this list handy

Ask these questions about your policy

  1. How much business property is kept at home, in storage, or in vehicles?
  2. Do customers, vendors, or delivery workers come to the property?
  3. Are personal vehicles used for work beyond commuting?
  4. Would a covered loss interrupt revenue or force a temporary move?
  5. Do any contracts require specific coverage or limits?

Sources and further reading

We used the public consumer resources below to prepare this guide. Your declarations page and policy language still control your coverage.