Tom Carver was always worried driving to shows and events. As the owner and creative artist of Northwood’s Impressions, he often had thousands and thousands of dollars of merchandise and equipment set up and left unattended at exhibition halls and other venues. It wasn’t as much slow traffic and sales, as it was if someone stole the property of worse, got injured from a tool or display.
Tom didn’t have business insurance and knew he was risking a big loss or even a lawsuit. “I have about 70% of my inventory with me and some very, very expensive tools which I used to create more products and as an attraction to my display, losing that would financially ruin my company.”
Tom is not alone, it’s estimated that 60-65% of all home based businesses lack adequate business insurance covered. Tom’s worries finally made him contact a business insurance agent and get coverage in place.
One reason many businesses fail to get proper coverage is assuming their homeowner’s policy will cover a loss.
Unfortunately, most homeowner’s policies cover no, or minimal damages to business related property and claims.
So, how does a home based entrepreneur protect their assets? First, depending on the size and type of business, check to see if you can add a rider to your existing homeowner’s policy. This type of rider can offer some protection to a solo business operator with minimal equipment and inventory. If you need more coverage, look to add an In-Home Business Policy.
An in-home policy covers a broader spectrum of contingencies, including loss of critical documents or theft of funds being taken to the bank for deposit. An in-home policy, issued by a home insurer or a specialty firm, usually is a plan against injury or theft covering up to three employees with a higher limit than the rider discussed above. It’s quite possible that your business needs more coverage than these options. It’s time to look at a Business Owner’s policy.
Claims usually covered by this type of plan include damage to or loss of business equipment and other assets, liability for customer injuries, loss of critical records, malpractice or professional liability claims, and loss of income or a business interruption in the case of a power outage or a natural disaster. Such a policy might also protect you when driving a personal vehicle for business purposes. A commercial insurance agent can provide this type of plan.
Getting the proper coverage for you home based business isn’t difficult. Not having it can be a financial catastrophe.