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Why homeowners insurance isn’t enough
Maine’s insurance regulator puts it plainly: “A homeowners policy was never intended to cover a business.” Typical gaps include:
- Business property: about $2,500 at home and $500 off premises, even if your laptop and camera kit are worth far more.
- Business liability: generally excluded, so a client injured at your home office may not be covered.
- Separate structures used for business are generally not covered.
- Lost income if you can’t work after a fire isn’t covered.
Your options
| Option | Best for | What it adds |
|---|---|---|
| Home business endorsement | Very small businesses with little equipment and few visitors | Higher business property limits and some liability |
| In-home business policy | Home businesses needing more protection | Business property, liability and income replacement |
| Business owner’s policy (BOP) | Businesses with employees, contractors or frequent customer visits | Full liability, property and business income cover |
Source: Maine Bureau of Insurance home business guide.
Policies freelancers commonly need
- Professional liability (E&O): for consultants, designers, developers, writers and other service providers; median about $88 a month. See professional liability.
- General liability: if you meet clients, visit sites or sell products; median about $45 a month. See general liability.
- Cyber insurance: if you handle client data; see cyber insurance.
- Commercial auto or a business-use endorsement: if you drive for work beyond commuting; see commercial auto.
Replacing employer benefits
When you’re self-employed, nobody else provides your safety net. Consider:
- Health insurance: Marketplace plans, with a possible tax deduction for premiums; see health insurance for the self-employed.
- Disability income insurance to replace earnings if illness or injury stops you working.
- Life insurance if anyone depends on your income; see our life insurance guide.
- Workers’ comp for yourself, optional in most states but sometimes required by clients.
Tips
- Tell your home insurer you run a business from home.
- List your business equipment with values and serial numbers.
- Check client contracts for required insurance and limits.
- Get quotes from online insurers that specialize in freelancers; see our insurer comparison.
Frequently asked questions
Does homeowners insurance cover my home business?
Only to a limited extent: typically about $2,500 of business property at home and $500 away, with business liability generally excluded.
What insurance does a freelancer need?
Usually professional liability, plus general liability if you meet clients or visit sites, and cyber if you handle client data.
How much is insurance for a sole proprietor?
Median premiums start at about $45 a month for general liability and $88 for professional liability, per Insureon’s 2026 data.
Do self-employed people need workers’ comp?
Usually not for themselves, but they need it once they hire employees in most states.
What is an in-home business policy?
A policy that combines higher business property limits, business liability and income replacement for home-based businesses.
Sources
- Maine Bureau of Insurance – Insuring your home business
- Insureon – Small business insurance costs (Feb 2026)
- U.S. Small Business Administration – Get business insurance
- NerdWallet – Hiscox business insurance review (Feb 2026)
- NEXT Insurance – AM Best Superior rating (Sept 2025)
Insurance prices, discounts and rules change often and vary by state. Figures were checked in October 2026; confirm details with the insurer or your state insurance department.