Own a Home-Based Business? Think ‘Presidentially’ When Considering Risks
No, we are not implying you fancy yourself the next Washington or Lincoln. But are you the proud owner or founder of one of the estimated 59% of established businesses in the United States that operate from a home? Then, even if your face doesn’t appear on Mount Rushmore, for your business you are still the top dog, head cheese, or grand high poobah. So welcome to your month, Ms. or Mr. President!
But just as you realize that there are similarities to all businesses, wherever located, you also know there are often concerns, considerations and risks unique to a home-based environment. And your Trusted Choice® independent insurance agent wants to remind you that designing proper protection encompassing both those common and unique risks requires ongoing communication and review of your current insurance and risk management programs.
Yet studies show that of the 11 million-plus home-based businesses, nearly 60% do not have insurance specifically recognizing and providing coverage for these unique risks. When asked about the reasons for this lack of additional insurance, business owners responded:
• They thought they were already properly covered by their personal insurance:40%.
• They thought their business was too small to insure: 30%.
• They could give no specific reason: 20%.
The first assumption is demonstrably false. Standard homeowners policies are designed for personal exposures, not business. While there may be small areas or limits of coverage available for certain types of home-based businesses, the vast majority will find coverage severely limited or specifically excluded for business losses related to such common risks as theft, vehicle usage, employee injuries, or life/health/disability. The largest potential gap in proper coverage arises from the lack of liability protection for claims arising out of business activities, whether the claim occurs in the home or elsewhere.
The second assumption above is also wrong, and the third response, at a minimum, shows a dangerous lack of knowledge.
Starting a home-based business may be the first step on your road to successful entrepreneurship. Whether your business ultimately remains in your home or grows into the need for outside facilities or a relocation, your Trusted Choice® independent agent stands ready to be your ongoing valued partner. Schedule a time today to review your current or future business plans, and let us help you establish a comprehensive insurance and risk management program to protect what we both hope will be your most valuable growing asset.
Can Mount Rushmore be far behind?
You’re Not Home Alone in Business The stereotype of a home-based business being about networking, consulting or holding sales parties has long been out-of-date. Today, the term can encompass everything from a one- person operation turning a hobby into an income to a major enterprise with dozens of employees. Here are a few facts from recent studies:
• Most home-based businesses — 67% — fall outside the traditional categories such as freelancing, independent contracting, consulting and virtual assistance.
• Of all new businesses, 69% are started in a home.
• Three and a half years later, 59% of those new businesses are still operating from a home.
• Home-based businesses that have employees: 75%.
• Women-owned businesses: 72% operate from home.
• Founders come from all age groups.Those planning to start a business include:
▪ 30.5% of young entrepreneurs.
▪ 25% of retirees.
Sources: http://smallbiztrends.com/2013/07/home-based-businesses-startup.html http://www.independentagent.com/News/PressReleases/Pages/2004/NA20040225120203.aspx