INDUSTRY INSIGHT
INSURANCE
SPONSORED CONTENT
STARTING A
HOME-BASED
BUSINESS?
Your homeowners coverage
may not be enough
I
t’s becoming more and more common these days for people to
run a small home business. Whether it is a side gig in addition
to a day job or a full-time operation, the low barriers to entry
and convenience of working from home has encouraged over
20 million Americans to set up shop. It could be selling things such
as cosmetics/skincare products, jewelry, and handmade items, or
services such as photography, stylist, recording studios and more.
Most assume that their homeowners insurance will take care of
coverage for these operations. They may be right–for now. However
small businesses have the tendency to grow and there may come
a point where the incidental coverage on homeowners may not be
enough. But how do you know when you have reached that point?
Covering Your Business “Stuff”
The first thing to consider is the personal property in your home
that relates to your business. This could be product inventory you
have stored or equipment that you use such as cameras, light kits,
or sound equipment, or even instruments if they are used for paid
performances. Homeowners policies usually provide a small amount
of coverage for these things while they are in your home but provide
no coverage off premises. This creates a very large coverage gap for
those people who transport their products to sell, or take equipment
to provide services at venues such as a photographer or DJ. In these
cases it is imperative to have an inland marine policy to cover these
items anywhere you may take them. A good rule of thumb is if you
have more than $1,500 in equipment or inventory in your home or
if you are taking any product or equipment outside your home as
part of your business, it’s time to talk to your insurance agent about
additional coverage options.
Covering What You Do
As for liability, your home policy may already have incidental
business liability or it may be an option to add to your policy.
However it could be limited to only cover certain types of business
operations. For example, a hairstylist may have no issue, but a
tanning salon may not be eligible at all. Your liability risk will differ
from operation to operation. A piano teacher will have more on-site
foot traffic with students coming into his or her home for lessons
as opposed to a graphic designer or wedding photographer who
tends to meet customers elsewhere. However even when liability is
provided it is very basic and will not provide the professional liability
This Industry Insight was provided by the Bill Flinn Agency.
For the last 40 years the Bill Flinn Agency has been serving
the Bethel Park and South Hills communities. Since
opening our doors in 1972, our mission has been to treat
our customers by the golden rule. Learn more about us at
www.billflinnagency.com, or stop by our office on South
Park Road in the heart of Bethel.
you may need, which is a large risk for those providing services, such
as photographers. This brings us to the ultimate question.
When is it Time to Move Beyond Your Homeowners Policy?
The first thing you need to do is make sure your homeowners
policy has the incidental business endorsement on it. Second, once
your total equipment or inventory reaches $1,500 (or whatever
your company includes in its policies) you may want to see if your
homeowners policy can be endorsed to provide a higher limit;
however this still may leave the issue of business property taken
outside your home. And, finally, if your total business personal
property is more than what your homeowners can provide or if you
are spending a lot of time at other locations and venues, it’s time to
talk to an insurance professional about commercial coverage. He/
she can provide options through a business owners policy, or at the
least a general liability policy and inland marine policy to cover your
inventory and equipment. The cost is much less than you may think
and will ensure that your investment in your home business will be
properly protected.
Most homes are
underinsure
by an average of 1
Do you have enough
Most homes are
coverage to rebuild?
underinsured
by an average of
Erie Insurance
100%
Guaranteed
Company A
$47,000
Underinsured
Do you have enough
coverage to rebuild?
Company A
$47,000
Underinsured
Erie Insurance
100%
Guaranteed
Company B
$51,000
Underinsured
19%
*
Company B
$51,000
Underinsured
Company C
$38,000
Underinsured
Bill Flinn Agency Inc
Bill Flinn Agency Inc
2754
S Park
Rd
2754
S Park
Rd
Bethel Park, PA 15102-3858
Bethel Park, PA 15102-3858
www.billflinnagency.com
www.billflinnagency.com
412-833-5351
412-833-5351
*64% of homes are undervalued—and potentially underinsured—by 19%, according to Marshall & Swift/Boeckh, a
leading provider of building cost data to real estate professionals. **ErieSecure Home SM with Guaranteed Replacement
Cost requires home improvements over $5,000 to be reported within 90 days. Coverage of costs to comply
with laws or ordinances is subject to limits. Depreciation may be deducted until repair or replacement is made.
Visit www.eriesecurehome.com/details or talk to your ERIE Agent for more information. Not all companies are licensed to
operate in all states. Go to erieinsurance.com for company licensure and territory information. Equal opportunity insurer.
*64%
of homes are undervalued—and potentially underinsured—by 19%, according
S1420b 5/12
to Ma
leading provider of building cost data to real estate professionals. **ErieSecure Home SM with
Cost requires home improvements over $5,000 to be reported within 90 days. Coverage o
with laws or ordinances is subject to limits. Depreciation may be deducted until repair or re
BETHEL or PARK
❘ WINTER
2019
17 information. No
Visit www.eriesecurehome.com/details
talk to your
ERIE Agent
for more
operate in all states. Go to erieinsurance.com for company licensure and territory informati