The short answer is yes, and the best way to know what is covered is to talk to your broker.

More and more people are starting home-based businesses, for everything from marketing homemade products to keeping a home office for a consulting business. From an insurer's perspective, this adds new types of risk to your home, and therefore, may require additional insurance.

Residential policies provide limited coverage on business property

Anything you use in running your home-based business is subject to the limits of insurance and/or might not be covered at all. Be aware that:

Dollar limits apply on business property, computer and software.This limit might be as low as $2,000 in total, which would not cover even the most basic home office.

Your policy might completely exclude any special equipment that you keep in your home for business purposes.

Items that are covered for business use are only covered while in the home. So, for example, if the computer you use for your home-based business is stolen while on a trip, it will not be covered.

Some home businesses may require added liability insurance

The operation of your home-based business might mean that you have more people coming and going, and therefore, more risk associated with the activities in your home. If this is the case, not only will a basic liability limit of one million dollars likely not cover you, but also, some insurers might refuse to cover a third party claim by a customer or employee who is injured in your home. If you think this situation applies to you, be sure to tell your broker about your home business and make sure your insurance company is made aware of your home-based business activities.

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The Bank/Trust Company vs. Your Own Individual Coverage

When coverage is purchased through the bank;

The Bank Policy is owned and controlled by the lender (i.e. bank).

1. The lender is the beneficiary (i.e. bank).
2. The lender controls the distribution of the insurance proceeds.
3. Insurance may be refused or the premiums increased if you change lenders, move homes or increase the size of your loan.
4. Insurance coverage decreases with the balance of your mortgage, although premiums continue to increase as you age.
5. There is minimal flexibility and no special policy options.
6. The individual you deal with is not an insurance expert.
7. At the time of the claim you could incur interest penalties which may not be covered under the policy.

When you purchase an individual policy;

1. Your policy is owned and controlled by you.
2. Your policy can only be cancelled by you.
3. You name the beneficiary.
4. Your designated beneficiary controls the distribution of the insurance proceeds.
5. Policy is fully portable whether you move or change mortgage carriers.
6. Insurance coverage does not decrease and you may choose to continue it after the mortgage is retired.
7. There is maximum flexibility with policy options such as disability waiver of premium.
8. You receive advice and personalized service from a qualified Life Insurance professional

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If your home will be vacant for any length of time, you may have an obligation to inform your insurance provider.  Do any of the following scenarios apply to you:

• you own a home that is vacant (no individuals or possession are currently in
• the home
• you plan to be away from your home for a period of less than 30 days
• you plan to be away from your home for more than 30 days

If any of these situations apply to you, here is an article that explains why it is important to contact your insurance provider and what you should do in any of these cases.

As always, we are here to help you with all of your insurance questions.  Feel free to contact us at any time or visit our Ontario insurance website for more information.

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