The topic of business insurance isn’t glamorous or fun, but it’s essential for gift basket business owners who are serious about protecting their personal and business assets.
Thankfully, Bomba Insurance Agency specializes in our industry’s insurance requirements, and their answers to the following five questions are meant to provide clarity and peace of mind whether you’re searching for coverage, considering a policy change, or wondering if your existing coverage is adequate.
Q: Why do home-based businesses need insurance?
A: You need insurance because as a business owner, you accept the responsibility of injury to your customer and/or to their property.
Q: I’m operating a hobby that’s not necessarily a business. Would my home’s insurance cover me?
A: Your home insurance may cover you, but if you file a tax return for the hobby and you are selling and making/losing money from it, then the hobby is excluded for liability coverage under your home insurance policy.
Q: My homeowner’s insurance agent says I can get a policy for about $10 a year under my home’s existing policy. Why not do that?
A: You must read the policy to learn what’s covered under the section entitled “Business Pursuit.” In most instances, it only protects you if a customer is injured in your home. This works for tutors and similar practices but does not provide coverage if you exhibit outside of the home.
Q: Isn’t business insurance expensive?
A: Not necessarily. Prices can be very different, so it’s best to shop around to compare rates. Some companies offer coverage for as low as $200 a year depending on the type of business.
Q: How much insurance is enough?
A: A general rule of thumb is to cover your business for what you have to lose. Cover your assets to start. Of course, with the current economy and the possibility of juries awarding substantial sums of insurance company’s money, it’s hard to put a number on it. Usually, the more insurance you buy, the cheaper it gets. I always tell new clients that even if they start with basic coverage, it is more protection than they had yesterday!
What questions or comments do you have for Bomba Insurance Agency? I encourage you to share your feedback in the comments section below.
This may be a scary subject, but isn’t it best to get answers now while questions are on your mind?
Stay tuned next week for four more questions about insurance coverage.
I’m pleased that Bomba Insurance Agency supports our industry, is a partner of this blog, and is sponsoring the fifth edition of How to Start a Home-Based Gift Basket Business.
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