If you own your home, you almost certainly have some kind of property insurance (and if you don't, you need to find it — now). This protects your home, including the building and most of its contents, in the case of fire and smoke damage, burglary and vandalism, and possibly earthquake and flood (although insurers may not offer coverage in certain geographic areas that are vulnerable to specific kinds of natural disasters). Your current policy may provide you with some level of coverage for the loss or damage of property that's used in a home-based business — but that coverage is probably small.

Consider increasing your policy to cover the full replacement cost of any equipment used in your business, as well as the cost of any home improvements you've made specifically for the business. In addition, even if your insurance policy covers you adequately for your business property, let your insurance representative know (in writing) that you've launched a home-based business. Being completely straightforward with the insurer now can help get your claims paid later.

Home Office Insurance

If your current property insurance coverage either doesn't cover your business or can't be supplemented, you need to look at a policy that deals specifically with home offices, home-based businesses, or small businesses. Remember that you'll need to cover office furniture, equipment, books, computers, inventory, signage, and even a building, if the business is located in an outbuilding on your land.

Renter's Insurance

Just because you don't own your home doesn't mean you can't insure what's in it. Renter's or tenant's insurance will cover your personal possessions. You may also be able to obtain endorsements or riders for the policy to cover business property and limited business liability coverage, although they tend to be smaller than those available to homeowners.