Starting a Home Business?

Know the Gaps

The 3 Insurance Gaps Every Business Owner Should Know

Starting a home-based business can be one of life’s most liberating decisions, adventurous career moves, and riskiest ventures.

There’s a lot to consider, and plenty of planning to do. However, as business savvy as you may be, too often, owners overlook how a home business may affect aspects of their existing home insurance…and the potential coverage gaps it may open up.

With help from a Farmers agent, though, you can help spot and fill coverage gaps like:

1. Risks are everywhere! Make sure you have the appropriate type of coverage.

Liability risks are all around us, and home businesses are no exception. Let’s say you’ve ordered a couple of new computers to fill out the home office, and when they arrive, the delivery person slips on a step and gets hurt. Now you’re at risk of a lawsuit!

Under normal circumstances, your homeowners and/or umbrella policy can cover these types of losses. Opening a home business means you’ll spend more time at home though, and that may expose you to greater liability risks or liability coverage gaps. If that’s your plan, it’s smart to consider reviewing your existing policies with a Farmers agent, because your homeowners and your personal umbrella policy would likely not cover you in a business-related liability issue.

To prevent any potentially costly coverage gaps, talk to a Farmers agent about your insurance needs before you start your home business.

2. Building a home office? Make sure your insurance will cover it.

Thinking about doing some renovations on your home, to make it easier to do business? Do you want to build a home office or an addition to work from?

Renovations can do wonders for your life and your home’s value, but it’s important to know they can also create gaps in your homeowners insurance.

A home remodeling project, big or small, can change your home’s reconstruction costs (what it would take to rebuild your home after a loss). Since that’s what homeowners insurance covers, it’s crucial to update your limits to reflect the cost to rebuild your home after the remodel.

If the limits are not updated, there could be a glaring difference between what you’re covered for and what it could actually cost to rebuild your house...leaving you to foot the bill in the event of a disaster.

3. Protect your family, spouse, and employees. Review your Life insurance.

According to a recent study by the US Department of Labor, in 2014, 57% of private businesses offered employees a life insurance plan, with an average of 97% employee enrollment.* That means a huge percentage of working people have life insurance through their job. If that’s your case as well, then leaving your existing job and starting a home business may lead to a life insurance gap.

No longer can you rely on work to provide life insurance, or even supplement your life insurance. As a small business owner, that’s your responsibility now.

If you’ll be the company’s only employee, consider talking to a Farmers Agent about reviewing your personal life insurance policy needs to make sure you’re covered the way you want to be.1 If you have, or plan on having employees though, it’s also smart to talk to your Farmers Agent about life insurance options related to your employees.

Major life changes, like starting a small business, can alter your coverage needs as well. Without taking the time to review your policies, you could expose yourself and your business to a variety of insurance gaps.

Thankfully, no one is better suited to help you spot gaps like a Farmers agent. Talk to an agent near you today, to help you find gaps that may be hiding in your coverage.



The information contained in this page is provided for general informational purposes only. The information is provided by Farmers and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this article or the information, products, services or related graphics, if any, contained in this article for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.

1 Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.
Products & features may not be available in all states & may vary by state.
* Securities offered through Farmers Financial Solutions, LLC, 30801 Agoura Rd. Bldg. 1 Agoura Hills, CA 91301. Member FINRA & SIPC.
* Products and Services/Auto or Home/Questions you may have about Risk Assessment Indicators