When Should You Choose to Buy Insurance for Your Home Business

HOME BUSINESS INSURANCE

Unfortunately, many home based business owners don’t realize they have little or no coverage under a standard homeowners policy. If something were to happen such as a delivery person slipping while making a business related delivery, then as homeowner you could find yourself without any coverage.

If you have started a home business, then obtaining home business insurance may have not been high on your list of priorities. In fact, you may have never heard about home business insurance before. But the fact of the matter is that everyone who operates a small business has a great  need for insurance coverage as any other type of business. Many professions that work from home like real estate agents, can benefit from learning how home business insurance should be an important part of their personal risk management program.

Here are some points to consider on home business insurance, including some tips on where to look for affordable home business insurance.

There is more than one type of home business insurance to consider. One that will perhaps be more familiar is affordable home business health insurance. Since you now work for yourself, you will have to make decisions about health coverage. Small business associations are often great resources for health insurance options. Also, many health insurance providers will allow you to participate in a group plan with as few as two enrollees. Check into your options for health insurance for home business needs and you may find something that is less expensive that you might think.

Along with health insurance, you need to think about home business liability insurance. If your business sells goods in particular, this is a good idea. Home based business liability insurance protects you from any issues that may arise from use of the product, and allows you to keep operating even if something went wrong with one product. Craft home business insurance would also protect you in the event someone is injured while in your home performing work for your company, which is another matter you should consider. 

Insurance for Home Based Businesses

Business insurance for home based businesses runs the gamut of what any business needs, from health to liability to workman’s compensation coverage. Finding home based business insurance that meets the needs of today and will grow with your company is what every home business owner needs to think about. Fortunately, there are all sorts of avenues for locating in home business insurance that were not there just a few years ago.

A number of providers now make their insurance available on the Internet. Spend some time investigating the terms and conditions you have to meet in order to comply with basic criteria. While you are at it, look for home business insurance coverage endorsement from small business associations for one home business insurance company or another. This will help you to steer clear of some of the more questionable firms and focus on those that have established a solid reputation.

Social Media Risks Abound for the Wealthy

ThinkAdvisor.com has a very insightful article, Unique Cyber Risks Your HNW Clients’ Kids Face, that examines how social media use among the children of affluent and ultra high-net worth parents, can lead to quite the cyber risk. It's a great reminder to check with your licensed personal insurance advisor to ensure you are completely covered.

For high-net-worth families, such risks are exacerbated by the fact that their wealth is a target. In some cases, affluent people also are public figures whose children can be easily tracked on Twitter, Instagram, Snapchat, Facebook and other online platforms. Even if your children are highly responsible, they may find themselves with others who are not.  

Cyberbullying can be as seemingly naive as 10-year-old Jimmy group-texting his pals that 10-year-old Maya is “ugly and stupid.” But if Jimmy continues to make such hurtful comments, and Maya physically harms herself because of them, his parents may be liable for defamation, not to mention Maya's emotional distress, sleeplessness, anxiety and worse. 

Many parents have no idea their child is texting, emailing or sending photographs deemed to be defamatory and libelous. They may be similarly shocked to learn their homeowners insurance may not cover the legal losses related to these activities. “Few homeowners policies address and absorb personal injury losses from libel and slander,” said Lucarelli. “If parents aren't vigilant, they can lose all their assets.”

Many insurers do not provide coverage protecting families from the financial costs related to cyberbullying, such as the settlement or verdict amount or the legal costs of defending the lawsuit. I definitely agree with the author. The amount of cyber risk the affluent and high-net worth individuals and families face is only going to grow. Back in June 2015, I wrote, Do You Need A Family Social Media Plan...

Not Everyone’s Social Media Risk is the Same

 For those in prominent positions or in professions considered high earning, it is exponentially more important to take steps to mitigate as much of the risk as possible. In today’s litigious society, paying to defend you or your family from a mere accusation could easily exhaust the limits of even a high-end homeowner’s policy. It is important to take a concrete look at how much risk you are willing to accept. An in-depth look at your assets, liabilities, and earnings potential provide a basis for calculating your risk potential.

How to Lower Your Family’s Social Media Risk 

In addition to mitigating your family’s social media risk, it is important to consider a cost-benefit analysis of proper insurance coverage. One of the most cost-effective ways to ensure you and your family are protected is through purchasing excess liability coverage. This type of coverage is most often referred to as a “personal umbrella.”

Before you decide to purchase any insurance policy, it is important to understand what you are buying. For a “personal umbrella,” it is important to understand that this type of coverage is secondary. This means it requires you having primary insurance such as a homeowners or renters policy. The reason it is called a “personal umbrella” is that it sits over your primary insurance policies.

Since it is supplemental, it works when the limits of the primary policy have been exhausted. For this reason, it is important to understand the relation between the limits on your primary insurance and excess liability coverage. The coverage on personal excess policies does not start until the underlying limit has been reached. In this instance, it is extremely important to match your primary policy limit to your umbrella limit, so no gap in coverage exists.

The coverage offered under personal excess liability policies varies. One important item to consider is whether or not the money for defense is included within the coverage limit or is separate.

Creating A Family Social Media Policy 

While insurance coverage is great, the best way to protect you and your family is to adopt a family social media policy. A family social media policy can include a number of items but most of all, you should look to establish what is ok to be shared and what type of information needs to remain private.