When Should You Use Personal Insurance vs. Commercial Insurance

By | May 1, 2023

If you’re an entrepreneur or a freelancer, then you know that managing risk is an important aspect of running a business, and one component of risk management is insurance. However, determining the appropriate type of insurance coverage can be quite an undertaking if you’re new to managing risk. This is especially true for entrepreneurs and freelancers who work from home and often use personal items for work-related tasks. It can be challenging to discern if additional commercial insurance coverage is necessary beyond personal insurance policies.

This article will compare personal insurance to commercial insurance, highlight its unique features, and explain when you should use one over the other.

Personal Insurance vs. Commercial Insurance

Before we delve into the specifics, let’s talk about what personal and commercial insurance are.

What is Personal Insurance?

Personal insurance is a type of coverage that protects individuals and their assets from unexpected events that may result in financial loss. It includes a range of policies, such as auto insurance, homeowner's insurance, renter's insurance, life insurance, and other insurance.

What is Commercial Insurance?

Commercial or business insurance, on the other hand, is tailored for businesses. It provides coverage for things like property damage, liability claims, workers' compensation, and business disruption. The intention of commercial insurance is to mitigate the financial loss that a business may incur as a result of unforeseen events.

What are the Differences Between Commercial and Personal Insurance?

Commercial and personal insurance have similar characteristics, as they both protect the insured against loss, but they do serve different purposes. The following list includes some of the biggest differences between personal and commercial insurance.

Named Insured

The named insured is the entity that is covered by the policy. For personal insurance policies, the named insured is typically an individual, couple, or family, providing coverage for unexpected events like accidents or damage.

However, if you work from home as a freelancer or entrepreneur, a commercial insurance policy may be more appropriate as it covers entities such as businesses. The named insured in a commercial policy is usually the business itself.

By having a thorough understanding of the named insured and selecting the right insurance policy, you can protect yourself and your business from unexpected financial losses.

Auto Coverage

If you work from home as a freelancer or entrepreneur, it's important to understand that auto coverage for businesses can be more complex than personal coverage. Depending on the type of vehicle, who's driving it, and how it's being used, the coverage can vary significantly. Commercial vehicles are often subject to specific regulations and commercial risks, which means drivers may need a special driver's license. All of these factors can impact your commercial auto coverage, so it's important to do your research and make sure you have the appropriate coverage if you work from home but use your personal vehicle for work-related tasks.

Liability Coverage

When you work from home, there are different kinds of potential liabilities to consider. For instance, if a client or customer were to get injured while visiting your home office, you could be held responsible. Cyber liability is also a concern, as is the possibility of an employee lawsuit. Commercial policies are specifically designed to help mitigate the risks associated with running a business.

On the other hand, personal insurance is focused on protecting you from the everyday risks you might encounter. Homeowner's insurance, for example, can help cover liabilities related to guests, natural disasters, theft, and more. But it's important to note that personal insurance won't cover the liabilities associated with running a business—it's there to protect you from the unexpected events that can occur in your personal life. As a remote worker, you need to make sure you have the right kind of insurance coverage to protect yourself and your business.

Type of Property

When selecting between personal and commercial insurance, you must take into account the property that requires coverage. A personal insurance policy typically provides coverage for homes and their contents, whereas a commercial insurance policy is designed to safeguard the structures and assets associated with a business, such as an office, warehouse, or other commercial property.

If you work from home as an entrepreneur, commercial insurance policies can offer content coverage if you store your wares in your basement, garage, or other space on your personal property.

When Should You Use Both Commercial And Personal Insurance?

As an entrepreneur or freelancer who works from home and frequently uses personal items for work-related tasks, you may be wondering when you should use personal insurance. Here are some scenarios where personal insurance may be appropriate:

1.   You use your personal vehicle for work-related tasks.

If you use your personal vehicle for work-related tasks, such as driving to meetings or making deliveries, you may need to add a commercial auto insurance policy This coverage can help protect you and your vehicle in the event of an accident while on the job.

2.   You work from home and use personal equipment.

If you work from home and use personal equipment, such as a computer, printer, or phone, you may need to add a business endorsement to your homeowners or renters insurance policy. This coverage can help protect your equipment in the event of damage or theft while on the job.

3.   You provide professional services.

If you provide professional services, such as consulting or freelance writing, you may need to add professional liability insurance to your portfolio of insurance. This coverage can help protect you in the event of a lawsuit related to your services.


Purchasing the right insurance is a great way to mitigate risk in your personal and business life. But sometimes it’s hard to determine the type and amount of coverage you need. If you’re looking to purchase commercial insurance or personal insurance, contact the insurance pros at Cell Brokerage. We’ll do the research for you to find the right insurance solution for you. Contact us today to get your quote started.

Talk to an Insurance Pro

    What Should Not Be a Part of a Risk Management Plan?

    By Cell Brokerage | May 15, 2023

    Effective risk management is crucial for businesses and corporations to safeguard their operations against potential threats. A comprehensive risk management plan can help companies prevent or minimize financial losses, reputational damage, and legal issues. However, there are certain elements that should not be included in a risk management plan.

    Read More

    Why Risk Management Is Important

    By Cell Brokerage | April 15, 2023

    Like everything else in life, running a business comes with risks. Risk management is a crucial aspect of any successful organization, yet many make the mistake of not taking it seriously. Businesses that take a passive approach to risk management, whereby potential risks are ignored or deemed insignificant, are at great risk in the event of an actual disaster.

    Read More

    When Is Commercial Auto Insurance Required?

    By Cell Brokerage | April 1, 2023

    Operating a business can be stressful—as a business owner, you have a lot to be responsible for, whether it be the daily business operations or protecting your business from financial loss. One way you can safeguard your business is by purchasing commercial auto insurance, which is a crucial form of insurance for business owners who use vehicles as part of their daily operations

    Read More

    What Flood Insurance Does Not Cover

    By Cell Brokerage | March 15, 2023

    Did you know that damage caused by floods is typically not covered under most standard homeowners insurance policies? In fact, if you reside in an area with a high risk of flooding, your mortgage lender will likely require you to purchase flood insurance through FEMA’s National Flood Insurance Program (NFIP) and associated programs provided by your insurance professional. However, it’s worth noting that over 20% of flood insurance claims come from areas that are not considered high-risk for flooding, which is why it’s recommended that homeowners consider obtaining coverage regardless of their location.

    Read More

    Car Insurance 101: Terms You Need to Know

    By Cell Brokerage | March 1, 2023

    In 2019, over half of the 12.15 million vehicles involved in collisions in the U.S. were passenger cars. When it comes to car insurance, it can be overwhelming to find the right policy to suit your needs, as there are many different terms to get familiar with. In this article, we’ll review 10 important terms you should know before signing up for a car insurance policy.

    Read More

    Mastering the Fundamentals: Understanding the Four Concepts of Effective Risk Management

    By Cell Brokerage | February 15, 2023

    Understanding the four core concepts is crucial for effective risk management, which is a critical component of any organization’s success. These include identifying, evaluating, prioritizing, and controlling risks. These steps support businesses in locating potential risks, evaluating their effects, prioritizing their efforts, and taking the necessary measures to mitigate them. Understanding these ideas can help safeguard an organization’s assets.

    Read More

    Why Is Life Insurance Important for the Self-Employed?

    By Cell Brokerage | February 1, 2023

    You may not realize it, but life insurance is an important part of being self-employed. Without it, your death could result in more than just the emotional toll it will take on those left behind. Here are a few reasons you should consider buying a policy.

    Read More

    Top Tips to Protect Your Business from Common Liability Risks

    By Cell Brokerage | January 15, 2023

    Running a business comes with its own risks. Read on to learn how you can protect your business from the liabilities that may arise from such risks.

    Read More

    4 Examples of Commercial Risk

    By Cell Brokerage | January 1, 2023

    When running a business, risk is one of those words that you simply cannot avoid. Not understanding the risk you face in your business could be preventing you from acquiring that sizable contract or that ideal client. There are all sorts of risks that businesses take on and understanding them is vital for any business owner. In this article, we’ll look at some of the most typical business risks and how you can protect your company from them.

    Read More

    Liability Insurance: What It Is and How It Works?

    By Cell Brokerage | December 15, 2022

    Choosing an appropriate insurance policy for your business from the sea of options available can be quite overwhelming. Identifying the significant risks your company might face and deciding on the right policies requires diligence. Taking care of liabilities and associated risks is also an essential part of protecting your business. Liability is a term that means duty, obligation, or responsibility. It grows with the business, and depending on the type of business; you will need different insurance policies.

    Read More