Home-based businesses account for more than half the small businesses in the United States. The Census Bureau estimates that more than 27 million home-based business exist as of 2007. This number has increased since the downturn in the economy, when many people lost jobs. This has led to the rise of small-scale, home-based businesses today and tomorrow.
Independent insurance agent, I operate my business from my own home. There are many benefits and technology can increase efficiency and productivity. I can spend more time with my family than commuting to work. I can respond to customer requests faster. I discovered that I am not the only one. It’s amazing to meet people who run small businesses from home.
But there is a problem. Many of these small business owners don’t have any home-based insurance. These entrepreneurs are often not covered by business insurance for three reasons. These are the reasons you should have a home-based business insurance policy.
- My Home Insurance Policy will protect me. It is logical to believe that since they have a home, their home insurance company will cover any losses. This is not true. Home insurance policies typically only provide minimal coverage for Business Property. You will only have minimal coverage if you have any product, equipment, and supplies that are related to your business at your house. If the product, machinery, or supplies are away from your home, then you’ll get even less coverage. Although you can add to this coverage with a special endorsement most insurance companies will not go above $10,000.
There is limited coverage for Business Property under your home hazard coverage policy. However, you do have some coverage for Business Liability. Imagine that a product that you make causes injury to someone. This type of claim will not be covered by your home insurance. Imagine if the UPS driver delivers materials and is injured while on your property because of a hazard. Are you covered for such a loss? No. Are you a Realtor? If you are a Realtor and you injure or cause property damage, you may be eligible for limited coverage. People are more likely than ever to sue in this risky world. Protect yourself with the right insurance for your home-based business. - I’ve owned my business from home for quite some time, and nothing has ever happened to me so I don’t believe I need it. This is a common excuse I hear from many home based business owners. They don’t realize they have any risk. I once worked as a seamstress in my home. She had a small room in which she made alterations for her clients. Also, she had cats. Because it was marking its territory, one of the cats was wearing diapers. What if one of the cats caused damage to a wedding dress? Or a pile of high-end jeans that were still in need of alteration? Even though nothing has ever happened in the past, it doesn’t mean that anything will happen in future. You can give confidence to your clients by having the right insurance.
- Business insurance is too expensive for me. This couldn’t be further from the truth. A basic policy for home-based businesses is all that’s needed. These policies can cost as low as $159 per year depending on what type of business you have and how much coverage you need. You might lose business if you don’t have business insurance. You will need to present a Certificate of Insurance in order to bid on contracts. This certifies that you have the minimum coverage. The right business policy can make a significant difference in your financial situation.
That’s it. These are the three reasons that you need business insurance to protect your home-based company. To ask questions, if you’re located in Arizona, feel free to contact my office. Call an Independent Agent if you live in another state for the right advice.
