Recently while having dinner with a friend, we got into a discussion about crafting items and selling them online. That sparked a conversation about other work from home businesses like being a consultant for LuLaRoe, Mary Kay, or Pampered Chef.
Like a lot of people, I wasn’t aware there are real risks with doing business from home before I started working in the insurance industry. My friend was no different and was totally unaware of the gaps in coverage.
First, I explained that if someone gets hurt at her home, whether it’s the UPS delivery person dropping off products or a customer picking up a purchase, the liability protection under her homeowner’s insurance policy would not protect her. Home insurance generally does not cover anything associated business activities.
Second, is the issue of coverage for her supplies, inventory, and customer’s orders. If there would be a loss (fire, theft, etc.) there is very little, if any, coverage under the standard home insurance policy for her items.
I used to be a consultant so I understand the money people have invested in their demos and inventory. Also, while I never held parties in my house, I did receive deliveries there and also went into the homes of others to do my demonstrations. I never thought to ask my insurance agent if there was anything to be concerned about with this part-time endeavor.
Some homeowner’s policies have an easy fix for certain types of home businesses, however, for others, they may need to explore a different type of policy. Regardless, you will probably be surprised how easy and inexpensive it is to get the right protection.
My advice to anyone considering starting your own business or becoming a consultant would be to contact their insurance agent to discuss the risks before they start. Your agent knows the limitations of your policy and what kind of coverage you may need.
