Think Your Homeowners Insurance Covers Every Building on Your Property? Think Again.
Many homeowners know that their homeowners insurance covers the house they live in, but fewer understand how coverage works for other structures on their property. Detached garages, workshops, sheds, barns, gazebos, and similar buildings are typically covered under the “Other Structures” section of a homeowners policy.
However, there’s one important exception that catches many homeowners by surprise:
If you use one of those detached structures for business purposes, your homeowners policy may not provide coverage for the ENTIRE BUILDING.
What Are “Other Structures”?
Other structures are buildings on your property that are not attached to your home. These can include:
- Detached garages
- Storage sheds
- Workshops
- Pole barns
- Fences
- Gazebos
- Detached carports
Most standard homeowners policies include a separate amount of insurance for these structures, usually a percentage of the dwelling coverage.
The Business Use Exclusion
Here’s where many homeowners run into trouble.
If your detached garage or shed is being used in whole or in part for business purposes, coverage under your homeowners policy may be excluded or significantly limited.
Examples include:
- A woodworking shop where you sell furniture.
- A detached garage used to repair vehicles for customers.
- A shed used to store landscaping equipment for your business.
- A workshop where you manufacture products to sell online.
- A detached building used as a photography studio or salon.
Even if the business is small or part-time, the insurance implications can be significant.
Why Does It Matter?
Insurance is designed around the risks it covers.
A structure used for personal storage presents a very different risk than one used for commercial operations. Business activities often involve:
- More frequent visitors or customers
- Business equipment and inventory
- Increased fire or liability exposure
- Higher-value property
- Commercial operations not contemplated by a homeowners policy
Because of these increased risks, a standard homeowners policy is generally not intended to insure business property or buildings primarily used for business.
What If You Run a Business from Home?
Many home-based businesses start small and grow over time. Whether you sell products online, operate a workshop, or provide professional services, it’s important to let your insurance agent know.
Depending on your situation, you may need:
- A home business endorsement
- Commercial property insurance
- A Businessowners Policy (BOP)
- Separate liability coverage
The right solution depends on the type of business, the value of your equipment, whether customers visit your property, and how your detached structures are being used.
Don’t Wait Until After a Loss
One of the most common insurance surprises happens after a claim, when a homeowner discovers their detached workshop or garage isn’t covered because it was being used for business.
A quick conversation with your insurance agent today can help identify potential coverage gaps before they become expensive problems.
We’re Here to Help
At Middle Creek Insurance, we believe insurance should never be a surprise. If you’re using a detached garage, shed, workshop, or other building for any type of business activity—even as a side hustle—we’re happy to review your current coverage and discuss your options.
A simple review today could help protect the business you’ve worked so hard to build.
Questions about your homeowners insurance? Contact Middle Creek Insurance today for a personalized coverage review.
