By Janean Chun
According to a recent survey by the Independent Insurance Agents of America Inc. (IIAA), homebased business owners are among the most underinsured of all business owners. Survey results show that more than 60 percent of in-home businesses are not properly insured. "It's been evident to us for a while that this was a sector of the community that was at risk," says Amy Gergely, consumer communications advocate for the IIAA. "Homebased business owners who are pretty savvy when it comes to other financial matters still remain uninsured."
Indeed, 44 percent of respondents said they didn't purchase business insurance because they thought they were already covered. Another 10.9 percent said they thought their business was too small, while 10.7 percent didn't have the time to look for a policy. Only 9.2 percent thought coverage was too expensive or said they didn't have the money (Gergely says a business policy can cost as little as $150 a year), and 6.2 percent were unaware they needed insurance.
Why would homebased business owners think they're exempt from needing insurance? "I wouldn't call it a mental block," says Gergely. "I'd call it a misunderstanding."
Which still doesn't explain the high number of renegade homebased business owners. Fifty-six percent neglected to purchase insurance even after they experienced a loss. "What they're not considering is that next time, it might be a big deal."