Business Insurance Isn't Personal
by A. Montalbano on 12/03/13
Recently I happened to stumble upon a conversation at a business function about a home-based business with coverage under the owners' homeowners policy. To place business product or service coverage under your homeowners policy is a risky and unprofessional decision. Let's clarify why it is not a smart business move:
1. The homeowners policy is designed for home coverage. Provides coverage for catastrophic occurrences associated with perils described on the policy. A business-related claim is not what you want as a hit against your homeowners policy. Save your homeowners claims for weather-related catastrophes.
- There are limits on business property coverage. (ex: a graphic artist computer cost $4000; the limit on a homeowners policy is $2500 and even less when off-premises.)
- There is no business liability from a homeowners policy. (ex: you pay for installation of a computer system in your office and the installer is injured when a bookshelf falls on his head.)
- No professional liability coverage. (Attorney; consultant, tutor, etc)
- No employee coverage. (ex: your assistant receives an injury from a cabinet.)
2. Lawsuits happen. Excess gaps in a homeowners policy, exposing you business to lawsuits. A business policy suited for your business needs keeps your business affairs separate from your personal life. When you don't protect your business, you aren't protecting your personal assets. Seek counsel with your insurance specialist about your business needs to keep your personal assets out of the courts.
The expense of risk is higher than the cost of an annual policy:
- 58% of home-based businesses are uninsured.
- 87% did not understand why a separate business policy is necessary.
- 11% experienced a loss.
Gaps in business coverage works against the success of your business. And as long as you have customers, you owe it to them to conduct your business to the highest professional standard.
Why risk the hard work you put into your business for the wrong type of policy.
