Are You Underinsured? You’re Not Alone

Guest Post by David Hing :: Times are tough and since the global economic collapse, many people have lost jobs and been unable to find new ones. Thankfully, many people have discovered an entrepreneurial talent bursting forth from the ashes of their employed lifestyle.

The mom entrepreneur has traditionally been ahead of the curve. With mothers statistically more likely than fathers to be staying at home to raise children, it’s no surprise that those who have either suspended or given up a career entirely have gone on to find the motivation to either try a business idea that they always wanted to or to monetize a hobby.

But insurance issues can easily crop up for an entrepreneur. You can be left with gaping holes in your finances that you need to cover with funds you’d be better off investing in further growth, or simply keeping as business profits. A home based business can often feel insignificant to its owners and a new entrepreneur might not really appreciate just how well they’re doing and what they have achieved. Often, a mom entrepreneur’s attitude leans toward the notion that they’re just bringing in a little extra money on the side. This lack of confidence means that public liability, business interruption or basic property insurance issues can get overlooked. Mom entrepreneurs are running companies that are often much more significant than they will give themselves credit for and they can still suffer from some of the issues faced by larger companies.

It’s often misunderstood: Rarely is a home based business covered by home insurance. Because of the different natures of risk associated with residential goings on and business related tasks, insurance policies are calculated and constructed in different ways accordingly. If you were to examine a regular home insurance policy, the vast majority of them would exclude any claims that arose from a commercial activity. This can also include equipment that is stored in your home but that you use for your business.

The way around this is simple. First, home based business owners have to become more confident in their ventures and with this confidence acknowledge that the only difference between their company and much larger companies is just a matter of scale. And you should protect a home based business the same way you protect any small business. Identify the risks that the company faces by hashing out what you do and where it could go wrong. Further consultation with a broker can also be a good idea if you are at all worried that you’ve forgotten something important. A good broker will be able to run through some simple policies that will address your particular needs, but if you consider yourself a small business as opposed to a work-at-home mom, then that mentality will help you find a wealth of resources at your disposal to help you protect your livelihood, your business and ultimately your peace of mind.

Written by David Hing for YOUR Insurance, a specialist broker that knows the only real differences between a home-based business and an office-based business is scale of operation and length of commute.