Home-based business insurance is a very important topic considering today’s business landscape with more and more home-based business being created for second income streams. The liability insurance and property insurance repercussions of NOT properly creating a home-based business insurance policy can be devastating.
Recession Feeds Increase of Home-based Businesses the very first line tells the story “More than half of all businesses in the United States are now home based.”
This next stat is mine and has no factual backing but I’d be willing to bet 80 percent of those Home-based businesses do not have proper NY insurance.
(As a side note I don’t usually like to use made-up stats and truthfully I would love to do a poll on this stat because I really do feel it would be true and its discovery would help drive these Hometrepreneurs to purchase the proper home-based business insurance coverage they need.)
Home-based Business Insurance
The truth is, if you are running a business out of your home and there is an insurance claim resulting from anything having to do with that business there is a HIGH likelihood your claim is going to be denied.
Your NY home insurance policy is NOT intended to cover home-based business insurance exposures.
Home-based Business Insurance Misconceptions
(Please see this article by IIABA for more details on Myths of Home-based Business. I have outlined the ones I feel are most crucial)
- “This is not a business its just a hobby. I don’t make much money.”
- For most NY home insurance policies if you make more than $2,000 a year you’re running a business and the claim will most likely be denied.
- “I have a Incidental Business Endorsement on my NY homeowners insurance policy. I’m all set”
- The Incidental Business Endorsement to a NY home insurance policy is used for exactly what it says “incidental business.” The lawyer that occasionally brings his work home. An accountant that will do some tax-returns from home. NOT the guy doing woodwork in his garage creating dressers as a side job. NOT the Mary Kay saleswoman who is having home parties twice a month. These are not incidental exposures and there will be gaps and limits to the coverage provided in the event of a loss.
- Additionally, this endorsement does not cover anything (liability or property) Off-Premises. So if you are delivering that hand-crafted dresser you just built for your neighbor down the street and get into a car accident that ruins the dresser… You’re getting Bupkis… Nada…
- “I never have anyone in my house for business purposes so I don’t need liability insurance.”
- Do you ever have materials for your Home-based Business delivered? If that delivery person slips and falls you are most likely SOL… Do you ever go Off-Premises for a trade show, delivery, conference, seminar, client call, etc? You guessed it, you don’t have Off-Premises liability.
NY Home Insurance Doesn’t Cover Home-based Business
You need a Home-based Business Insurance Policy. Now before you get all fired up that an Insurance Salesman is trying to sell you another insurance policy realize that most home-based business insurance policies run between $150 and $350 a year.
That is NOT a lot of money for a lot of coverage considering you get liability insurance, loss of income and business property insurance… I think the sustainability of your business is worth that kind of investment.
Do you?
To get a quote for home-based business insurance call us at (518) 456-6688 or click here to start a quote by email.