More than half of America’s businesses are home-based, according to the U.S. Small Business Administration. However, coverage for anything business-related (like your home office, samples, computer equipment, etc.) is usually excluded from your homeowners insurance policy — or only covered up to a certain limit. Making sure the home-business is properly covered by insurance should be a top concern for both the agency and the businesses owner. Here are a list of the top home-based business in 2017:
- Personal trainers
- Tutoring/Childcare Service
- Business coaching and mentoring
- Accounting/CPA
- Web design/ computer repair
- Photography
- Consultants- Beauty/Wedding etc.
- Craft business – Sewing, Jewelry
- Realtors
The proper insurance coverage can provide your clients with the financial security that they need to keep their business running after experiencing a loss. 3 primary coverage options include:
- Endorsement to the Homeowners Policy: The home-based endorsement provided by most carriers will increase the business personal property limit from $2,500 to about $10,000. This endorsement does not provide liability coverage or business income coverage and it is very limited in coverage. Don’t forget to add scheduled items to this policy for business owners that may have items such as camera equipment, fine arts, musical instruments, and more.
- In-home business policy: An in-home policy covers a broader scope of coverages, including loss of critical documents or theft of funds being taken to the bank for deposit. This policy may provide liability, personal injury, and theft coverage. Rates typically run from $250 to $500 and the plans can cover as much as $10,000 in losses.
- Business owner’s policy: Business owners who need more than $10,000 of coverage should purchase a business owner’s policy. This is the most comprehensive policy available for small business owners. Coverages provided include damage to or loss of business equipment and other assets, liability for customer injuries, loss of critical records and loss of income due to business interruption in the case of a power outage or a natural disaster.
The best way to find out if your personal lines clients have a home-based business is to simply ask. It’s that simple – and they will surely thank you for it. As a trusted advisor, it is your job to advise your clients not only on the best insurance protection for their personal needs but also their business needs.
Contact me for more information on how to keep your clients covered in any situation.
Tamara Gatson
President, Gatson Training Associates
Founder, insurancelicensenow.com