Home Based Business Insurance Considerations

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:
69 Percent of U.S. Entrepreneurs Start Their Businesses at Home – Small Business Trends (smallbiztrends.com)
Media | New National Survey Finds Nearly 60 Percent of Home-Based Business Owners Without Insurance (independentagent.com)