A fire in your shed destroys all of your uninsured landscaping equipment.
A customer slips on your sidewalk as they enter your pottery business.
A client sues you for damages caused as a result of poor advice you gave.
If these claims, or others like them, happened to the average home-based business, the result would be financial devastation for the business and home owner.
There are thousands of Home Based Businesses in New York. They range from full-time professionals (lawyers, accountants, consultants of all types) to part-time hobbyists and everything in between. Pinning down an accurate number is hard to do, but it’s no stretch of the imagination to think the number of these businesses are growing daily.
This also a growing problem that could cause people to be in danger of losing everything they’ve worked for.
Your home, pension, investments, all vanishing due to an uncovered claim.
Over the years we’ve come across countless owners of home based businesses in their owners’ homes that are not insured.
When this fact is brought to the Home Based Business owner’s attention, they are shocked to learn that their homeowner insurance (HO) policy offers virtually no protection for the business.
The HO policy was designed to cover a residential premises, not a business.
Still, many home based business owners mistakenly believe they have coverage and are outraged when they have a denied claim. Don’t let this happen to you!
The following 4 myths are among the most widely circulated about home based businesses:
Myth 1 – What I do is a hobby, it’s not really a business.
If you earn more than $2,000 from a Home-based Business activity it’s a business and specifically excluded from the homeowner policy.
Myth 2 – My HO policy will cover a property loss or lawsuit from my home-based business.
The HO policy provides zero dollars of coverage for liability attributed to a Home-Based Business regardless of where it’s conducted. Any detached building housing a business is specifically excluded from coverage. Any business property in the house usually has a maximum coverage limit of a few thousand dollars. Take the same property away from your residence and the coverage can drop to $500 or less.
Myth 3 – My clients never come to my house, so liability is not an issue.
Liability losses can happen at trade shows, industry meetings, client meetings, anywhere really. These are called off-premise losses and they are specifically excluded from the HO policy.
Myth 4 – My agent added a business endorsement to my HO policy, so I’m covered.
TRUE, sort of. No, not really.
The HO policy can be modified to allow some business use, but this still does not protect you from off-premise liability and judgments can easily run into the $100,000’s, plus lawyer fees. Secondly, the endorsement won’t carry as much coverage as a proper policy.
So, how do you protect yourself properly?
The single best method for insuring a home-based business is a Business Owners Policy (BOP). A BOP has liability, property and many other incidental, but vital, coverages included for one low price.
There are special policies for home-based businesses that cost as little as $300 for $1,000,000 of liability coverage.
If you decide to purchase even lower limits, the premium can drop to under $200. For the year.
Is it worth risking everything you own to save a few hundred dollars?
Don’t be caught off guard, protect yourself and your business properly.
Call us today for help, 845-343-0855