You need insurance for your business--period.
There are so few homebased businesses that do not require somesort of business insurance that you should simply assume you needit. Why? Because if you are a sole proprietorship or partnership,you can be personally sued for business actions. If you are acorporation, your entire operation can become extinct--and yourshareholders very upset--should a lawsuit or other problemcall for huge sums of money that the corporation cannotproduce.
Excerpted from Starting a Home-based Business