A survey, conducted by the Independent Insurance Agents & Brokers of New York Inc, found that “tens of thousands of home-based businesses in New York and eight other Northeast states are needlessly at risk because their owners thought they did not need insurance or were covered by another policy.”
The survey determined that there are around 1.5 million full, or part-time home-based businesses in the nine-state region. “Nearly 900,000 or six in 10 (57.4 percent) were uninsured,” said the announcement. “Among them, nearly 70 percent (68.9 percent) lacked proper coverage because of a mistaken belief that a homeowners’ or another policy protected the businesses assets or provided liability protection.”
“That last survey finding for the Northeast is double the average for the entire nation,” stated IIABNY President & CEO Richard A. Poppa. “This lack of understanding illustrates the urgent need for the insurance industry to do a much better job educating a segment of the market that is only growing in importance.”
The IIABA survey, which was conducted Feb. 6-10, 2004 by Media, Pa.-based International Communications Research, also found more than two in 10 (21.1 percent) of in-home business owners in the Northeast could not provide a reason for operating their business without insurance, nearly identical the rate for the entire nation, according to the survey. Another 10 percent thought it cost too much to insure their business, while a statistically insignificant number of home-based business owners in the Northeast perceived their business was too small to insure or posed no risk. Nationally, 29 percent thought so.
Losses, such as a theft, fire or injury related to a home-based business, were reported by nearly 5 percent of the Northeast survey respondents, about half the national average. Poppa said owners of uninsured home-based business should understand those kinds of losses can be adequately covered through a comprehensive commercial policy costing as little as $250 in annual premiums, depending on location, size and nature of the business.
The IIABNY and IIABA offered the following tips to home-based business operators:
— Check your homeowners’ policy: Homeowners’ insurance was never meant to cover business exposures. Coverage for certain business items is limited and homeowners’ coverage provides no liability insurance for home-based businesses. Additionally, a homeowner’s policy affords no business interruption coverage in the event that a loss causes a home-based business to cease operations. However, a home-based business owner may be able to obtain an endorsement to add these coverages to an existing homeowners’ policy. See an independent insurance agent to secure coverage for your home-based business.
— 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 policy. An independent insurance agent can provide guidance on the most appropriate type of coverage.
— Protect Yourself: If a home-based business is a full-time occupation, business owners must consider protections such as life insurance, health insurance, disability protection and workers’ compensation. An independent insurance agent can help identify risks areas and find the appropriate coverage to protect you, your family and your home-based business.
The bulletin said the survey was conducted in New York, New Jersey, Connecticut, Massachusetts, Rhode Island, New Hampshire, Maine, Vermont and Pennsylvania. It involved “more than 1,000 interviews were weighted to provide national estimates of 110.8 million U.S. households. The average margin of error for the survey’s national results is +/- 3.1 percent.
For more information on the survey, visit: www.independentagent.com or www.TrustedChoice.com.
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