Short answer: yes, almost certainly, and probably for less than you’re paying for your streaming subscriptions. I’m Storm Bailey, owner of KMO Insurance Agency here in Overland Park, and this is one of the most expensive misunderstandings I run into as a broker — right up there with people who think their dog is covered no matter how many mail carriers he’s convinced are burglars.
Here’s the pattern I see constantly: someone starts a business out of a spare bedroom — bookkeeping, freelance design, a candle line that outgrew the kitchen counter — and just assumes their homeowners policy has their back, because, well, the business technically lives in the home. It doesn’t work that way, and most people don’t find that out until they’re holding a denied claim and a very confused look on their face.
That’s the gap KMO exists to close. As an independent agency, we shop your situation across eight-plus carriers instead of selling you whatever one company happens to have on the shelf, which matters a lot for home-based businesses because coverage in this category is wildly inconsistent from insurer to insurer. Some of it’s genuinely good. Some of it’s a rider that covers your laptop and nothing else. Figuring out which is which is, frankly, the fun part of my job.
So let’s actually answer the question properly, because “talk to an agent” isn’t a real answer, it’s a deflection.
Standard homeowners and renters policies are built to protect your personal life — your stuff, your family, your liability as a private citizen. The moment money changes hands for goods or services out of that address, most insurers treat it as a business exposure, and most standard policies either exclude it outright or cap it so low it’s basically decorative. A typical homeowners policy might cap business property coverage at $2,500. If you’re running a design studio with three monitors, a color-calibrated display, and a decade of client files on an external drive, $2,500 covers approximately one of those monitors.
Liability is the bigger issue. If a client trips on your porch step on the way in for a consultation, or a delivery driver drops a pallet of your inventory on their foot, your homeowners liability coverage can flatly deny the claim once the insurer determines it happened “in connection with a business.” That’s not a gray area — it’s usually printed right in the exclusions section, sentence three, right after the part about earthquakes.
Not every home business needs the same coverage, and this is where a generic “get a BOP” answer falls apart. What you need depends on what you’re actually doing:
For a lot of solo operators, a simple business owner’s policy handles all three at once — bundling liability and property into one manageable premium, often starting well under what people expect. For higher-inventory or higher-traffic setups, we sometimes layer in additional coverage on top. This is exactly the kind of case-by-case sorting our business insurance page walks through in more depth if you want to see how the pieces fit together before you call anyone.
I had a client — candle business, beautiful stuff, sold mostly through local markets and word of mouth — who stored about $9,000 of inventory in her garage during peak season. A freak hailstorm blew a garage door panel loose and soaked most of it. Her homeowners insurer paid out $2,500, the sublimit for business property, and closed the file. She was out $6,500 on a policy she’d been paying premiums on for years, fully believing it had her covered.
That conversation is the reason I bring this topic up with literally every home-based business owner I meet, whether they asked or not. It’s not that homeowners insurers are being sneaky — the exclusion is standard industry practice, and it exists because homeowners policies were never priced or underwritten to absorb commercial risk. It’s just that almost nobody reads that section until they need it, and by then it’s too late to do anything but learn the lesson.
If your home business touches client data, payment information, or anything you’d be mortified to explain in a breach notification email, it’s worth asking about cyber liability too. Home-based businesses are frequent targets precisely because attackers assume — correctly, most of the time — that a solo operator hasn’t built out the defenses a bigger company would have. A basic cyber endorsement is inexpensive relative to the cost of a breach, and it’s one more thing we check when we’re building out coverage for a home-based or small business policy.
This is usually the part people brace for and then are pleasantly surprised by. A basic business owner’s policy for a low-risk home consultancy often runs a few hundred dollars a year — genuinely less than most people spend on business cards they’ll never reorder. Product-based or client-facing businesses run higher depending on inventory value and foot traffic, but it’s rarely the budget-breaker people assume, especially once we’ve shopped it across carriers instead of taking the first quote at face value.
According to the Insurance Information Institute, business owner’s policies remain one of the most cost-effective ways for small operations to bundle property and liability protection in a single policy. The National Association of Insurance Commissioners similarly recommends small business owners review coverage gaps annually as operations grow — inventory, revenue, and foot traffic rarely stay static, and neither should your policy. The U.S. Small Business Administration also flags business insurance as a foundational step for any home-based operation before it scales, right alongside registering the business itself.
If money is changing hands for something you make, sell, or advise on — even out of a spare bedroom — your homeowners policy almost certainly isn’t backing you up the way you think it is. It doesn’t take much to fix that gap, and it takes a lot more to recover from finding out about it the hard way. If you want a second set of eyes on what you actually have versus what you actually need, that’s what we’re here for — reach out to our team through KMO Insurance’s business coverage page and we’ll walk through it together, no candle-related trauma required.