In fact, Arizona was recently rated as the 6th best place in the country to do business.
Here in Maricopa County, we have thousands upon thousands of home-based businesses, and I insure many of them in Chandler, Gilbert, Phoenix, Tucson and the rest of the Valley.
Success is hard-earned. Home based business owners jump through hoops and rules and regulations (take for example the City of Tucson's home-based business ordinances) to get started. Then there are the financial difficulties to getting up and running. It's tough.
But the majority of home-based businesses are still growing strong after three years.
Congratulations if you are one of them!
However, in spite of this good news, I see one very important area that is often neglected, and it can close your business down.
Most home-based businesses don't have insurance.
Joe, I do have insurance. My homeowners covers me!
There is limited coverage for your business if you operate from your home. Very limited.
For instance, if you have equipment that is owned or used by your business, like computers, printers, filing cabinets, desks, chairs, backup hard drives and other equipment- your homeowners policy, if it covers it at all (not a guarantee), limits the coverage to usually $2500 on premises, and $500 off-premises.
And that's just equipment and tangible property.
What happens if one of your customers visits you at home, and burns herself on the coffee you just made to be nice? Or what about the delivery person tripping on your steps as he delivers your business package to your home office?
Are you covered then?
It's very possible that you aren't.
Finally, you may still be exposed to liability (think expensive lawyers suing you!) for all kinds of things that your homeowners policy was never designed to protect:
- Defective products or services.
- Late (or no) delivery of promised services or products.
- Slander, libel or defamation (fancy legal terms for saying bad things about someone).
- Physical injury caused by your product or service.
Most small and just starting out home-based businesses in Arizona are too busy to think about all these depressing possibilities. You're just trying to keep growing.
I understand that.
Good news: it's easy to fix this problem.
So let's make it simple, and thanks to a great article about insuring your home based business over at the Insurance Information Institute, we can keep the discussion simple.
There are normally three ways to insure your home based business in Arizona:
- Homeowners Policy Endorsement
Sometimes, making sure the gaps are covered is as simple as a very inexpensive endorsement to your existing homeowners policy. You might be surprised at low cost this type of home-based business coverage costs in Arizona. Of course, it only works for certain businesses, so make sure you check with your agent.
- In-Home Business Policy
Some companies offer very customized policies called in home business polices. These are essentially an in-between solution, offering more protection than a normal endorsement to a homeowners policy, but not quite all the coverage of a true Business Owners Policy. As endorsements get better, and Business Owners Policies get more affordable, these are not used as often.
- Business Owners Policy
Even though your are "small" and operate out of your home or garage, a Business Owners Policy (also known as a 'BOP') may be exactly what you need. These "workhorses" of the small business insurance world are simple, affordable, and comprehensive. A BOP is customized to cover your business property, your inventory, your liability risks and other exposures. Of course, each business is unique, so your agent will need to tailor the policy to your exact needs.
First steps. You can start today!
But it doesn't have to be on your "avoid at all costs" list either.
You don't need to get all your stuff together like you are being audited. And it's not scary like going in for a root canal.
If your local insurance agent in Arizona is experienced working with home-based businesses, she or he can make this painless. Almost fun. No, really. I'm not kidding.
So call your agent today. If you need an experienced agent who knows the ins and outs of small business and home-based business insurance, I'd be honored to help. You can call me, Joe Baselice, at (480) 940-0909.
I might ask you a few questions like:
- What is the nature of your business? (Pretend you are selling me your service.)
- Are you the owner or is it someone else?
- Do you have any employees? Do they work out of your home also?
- How many customers visit your home? How often?
- Do you provide home care services? Daycare?
- Are there business signs displayed?
- Are there any unusual risks?
See? Not too hard.
We can chat about how you started and what your dreams and goals are. And I can help craft a custom policy that meets your needs for an affordable price.
photo by alan levine on flickr, cc licensed