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Home-Based Businesses

Home-Based Businesses

You’ve no doubt heard the stories of big businesses that were started in someone’s garage. Windows, Apple, Hewlett Packard, Disney and many other companies began with an idea and started out as a home-based business. Could the next big idea come from your garage or dedicated home office space? It’s possible. While you’re building that dream, sometimes things happen along the way, and your home office or workspace could be damaged. Will your homeowners or renters insurance respond? The short answer is: no.  Here is the lowdown on what your homeowners policy won’t cover, and how to protect yourself if you have a home-based business, or even if you just work from home. Your Homeowners Policy Won’t Cover You The Insurance Services Office (ISO) standard policy Homeowners 3 – Special Form (HO3) is used as the basis for most homeowners coverage. Not all insurance companies use this exact form, so it is best to read your policy and talk to your broker. The HO3 defines business as “a trade, profession or occupation engaged in on a full-time, part-time or occasional basis” or “any other activity engaged in for money or other compensation”. Your homeowners insurance policy is designed to cover your home, your personal items and your personal liability. It was not designed to cover business pursuits, and in fact excludes operations out of the home related to business. Other Structures: Coverage is excluded for other structures “from which business is conducted”. If you run your business out of the shed or garage, there is no coverage. Business Property: There may be some very limited coverage for business items...
Risk Management for Small Business

Risk Management for Small Business

As a small business owner, you are used to handling all of the business management yourself. You might do the payroll, the banking, maybe even the taxes.  You even went out, found an agent and got the insurance policies yourself. Now those policies are sitting in a drawer somewhere just in case you need them.  Could your insurance agent be doing even more to help you? Is your agent also your risk manager, stopping you from walking into certain peril like a Lemming?   A Risk Manager Helps You Before the Accident Risk management is defined for insurance purposes as “The practice of identifying and analyzing loss exposures and taking steps to minimize the financial impact of the risks they impose.” Business owners should be focusing on business: creating it and keeping it.  Sometimes that means taking risks or doing things that are out of the ordinary.  An insurance agent who is also a risk manager can be a valuable resource during this time. Discussing your future plans with your agent can help you determine where the pitfalls of a plan or project might be.  These are all questions a risk manager can help you answer: What are the risks of injury? What are the risks of financial loss? Are there gaps in your current coverage that would prevent you from being protected? Do you have the right coverages for that contract?   A Risk Manager Helps Minimize the Impact of a Loss Inevitably, loss will occur.  Whether it is a natural disaster or a man-made one, somewhere along the way your business may experience a loss. A risk...