# Insurance coverage gaps for home-based businesses

> Live situation record from CLSTR: https://clstr.news/situations/insurance-coverage-gaps-for-home-based-businesses
> Updated: 2026-08-24T14:30:05.000Z. Sources: 5. Developments: 2.

In the United States, entrepreneurs operating businesses from their homes face significant insurance vulnerabilities. While approximately 19 million U.S. businesses operate out of residential properties, standard homeowners and renters insurance policies are generally designed for personal use rather than commercial activity.

Dennis Shirshikov, a professor of finance and economics at City University of New York/Queens College, indicates that although these personal policies may provide limited coverage for business equipment, they frequently exclude coverage for professional mistakes, lost income, inventory, customer claims, and business-related injuries. A primary risk for these owners is the potential for denied claims if an insurance carrier discovers business operations are being conducted on the property without prior notification.

## Timeline

### 2026-08-24: Home-based businesses face potential homeowners insurance gaps

Home-based entrepreneurs face potential insurance gaps, as standard homeowners and renters policies often exclude business-related liabilities, injuries, and inventory losses.

3 sources. https://clstr.news/cluster/home-based-businesses-face-potential-homeowners-insurance-gaps

### 2026-08-19: Risks and essentials of business insurance coverage

Business insurance is essential for managing risk and meeting legal requirements. Underinsurance can lead to severe financial loss and the potential exposure of an owner's personal assets to legal claims.

2 sources. https://clstr.news/cluster/risks-and-essentials-of-business-insurance-coverage

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Cite as: Insurance coverage gaps for home-based businesses. CLSTR, https://clstr.news/situations/insurance-coverage-gaps-for-home-based-businesses