Operating a small business from home can free entrepreneurs from the costs of leasing space and commuting. But too many of them may short-change themselves when it comes to buying insurance.
A recent survey commissioned by the Independent Insurance Agents and Brokers of America found that nearly 60 percent of the nation's 11 million home-based businesses do not have insurance coverage.
Madelyn Flannagan, IIABA's vice president of education and research, explains that home-based business owners are at risk for financial losses associated with theft, accidental damage, natural disasters, vehicle accidents and liability if an employee suffers an injury while on the job or a business guest is hurt while visiting their business.
To protect home-based businesses, IIABA offers the following tips:
* Check your homeowners' policy. Coverage for certain business items often is limited. Additionally, a homeowner's policy affords no business-interruption coverage in the event a loss causes a home-based business to cease operations. A home-based business owner may be able to add this coverage to an existing homeowners' policy.
* Check business insurance policy options. There are several options for home-based businesses, including incidental business endorsement, a business owner's package policy or an in-home business owner's package policy.
* Protect yourself. If a home-based business is a full-time occupation, business owners must consider protections such as life, health, and disability insurance, and workers' compensation.
More information on insurance for home-based businesses is available at www.independentagent.com or www.trustedchoice.com.
Stephen L. Rosenstein is co-chairman of the Greater Baltimore SCORE Chapter No. 3. Call 410-962-2233 to speak to a SCORE counselor or visit www.scorebaltimore.org. To send a question to SCORE, e-mail smallbiz@baltsun.com.
