Personal Lines Tips You Can Use
One of the best ways for agents and brokers to impress and build credibility with their clients is to provide advice and suggestions that help them reduce their risk of loss and their insurance expenditures. And if you are like many insurance professionals, you are continuously seeking unobtrusive ways to contact your customers to remind them that you are there for them. Providing cost-saving risk management advice is certainly one way to do this. Many firms are also in search of high-quality content to include on their websites to encourage people to visit and to attract search engine traffic. Thus, we offer you the monthly
"Tip You Can Use" in each issue of Personal Lines Pilot to help you achieve all of these objectives. You are free to use this month's tip any way you wish, subject to the license terms included below. Simply copy the tip, paste it into your website or newsletter, and make any formatting adjustments, being sure to leave the copyright attribution and Web links as per the license agreement below.
This Month's Tip
Purchase Special Insurance for Your Home-Based Business
The United States has experienced a rapid growth in home-based businesses in the last decade. The U.S. Census Bureau reports that there are now more than 11 million home-based businesses in the country, a figure that is expected to rise in the coming years.
But if you run a home business, losses associated with that business may not be covered under your homeowners policy unless special coverage endorsements are added. Some insurers sell an endorsement that covers losses associated with a home-based business. We can quickly find out if such an option is available.
What if you are operating a home-based business without your insurer's knowledge? Suppose you had a small fire that damaged your home office and computer and resulted in some lost income. Once your insurer sends an adjuster who, while investigating your claim, discovers your business, your insurer may deny some or all of the claim because of business-related exclusions and restrictions found in many homeowners policies.
Conversely, if you paid the additional premium to add a home-based business endorsement to your homeowners policy or you bought a businessowners policy (BOP), your loss would likely be covered—even the loss of income. (A BOP is a separate policy form designed to insure the property and liability exposures of small businesses.)
And do not forget about liability. If you have business visitors in your home and they get hurt, many insurers' homeowners policies will not cover those injuries because of the business-related loss exclusion found in the personal liability section of the policy. Again, it is necessary to purchase a special endorsement to the homeowners policy or a separate BOP. Also, if your activities give rise to any type of errors and omissions or professional liability exposures, they are not likely to be covered under either your homeowners policy or a BOP. A separate errors and omissions (E&O) policy will need to be arranged for this loss exposure.
Different insurance companies have different criteria for excluding business-related losses from their policies. If your current insurer cannot respond to your coverage needs, we can present several options to you.
But the important thing to remember is this: if you are running a business out of your home, call us. We will work hard to assure you are properly protected.
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Copyright 2009
International Risk Management Institute, Inc.
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While these tips were carefully researched by our personal lines experts, they are of necessity general in nature and not intended as legal, consulting, or other professional advice. They may also become outdated over time as business conditions and insurance industry practices change. We provide them to you
"as is," and it is your responsibility to assure that the advice they provide is applicable to your geographic area, the insurers you represent, your state's insurance regulations and environment, etc. If you place them on your website, you should also review them from time to time to assure that they are still up-to-date and correct given changes in the insurance marketplace, regulatory environment, or practices. We are providing you with the use of these tips at no cost to you, and your use of them indicates that you agree that you will not attempt to hold IRMI responsible for any liability or damages arising from your use of these tips.
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