My neighbor is an attorney who quit practicing at a large downtown firm to start his own law practice from his home. Actually, he is using his detached garage as a makeshift office and the fact that he's using the detached garage as his office is significant.
If he instead chose to work from his spare bedroom, his current home insurance policy wouldn't have any heartburn with the fact that he's running his office from home. In fact, if he worked anywhere inside the confines of his home his insurance policy would work just the same as if he didn't work from home.
But what he didn't understand is that because he is working from his detached garage, the entire policy coverage for the garage would have been completely wiped out if it was damaged by fire, wind, etc! So if his detached garage burned, there would be no coverage to rebuild the garage. It has to do with a little-known exclusion taking away coverage to detached structures that are used for any business venture (by the way, a court ruling many years ago found that even storing boxes of files in a detached structure was enough for an insurance company to invoke this exclusion!).
Thankfully, because he and I talked about his new business we made a slight change to his policy which gave back coverage to his detatched garage for use as an office. Every policy and every situation is different, but the point is that he wanted to pursue his dream of running his business from home and because he brought it to our attention, we were able to help him reduce his worry about his insurance so that he could focus on building his practice.
