- Insurance Case Studies
Home Based Business
A longtime homeowner insurance customer called our agency one day. She mentioned that she was selling Scentsy (candles) to earn extra income, and to be able to stay at home with her daughter. Of course the insurance agent in me, bells went off in my head. Is that a business??
She explained that part of her business was to throw in-home parties on occasion, and that she was a representative for the company with no exposure. Of course, Scentsy stands by their product and would cover a claim, but they do not cover the sales representative’s general liability exposure. After reviewing her contract with the company, it directed her to contact her homeowners insurance company to see if they can provide coverage for the business operations.
There are some very typical business exclusions in a homeowners policy. If you are running a business out of your home, you may not have proper liability if someone were to get hurt. There is also a limitation as far as business personal property on and off premises which is very minimal coverage. As far as homeowners insurance definitions, a “business” can be any activity that you are compensated for and have made at least $2,000. When I asked my client if she would make more than $2,000 in a year, she responded with “I was hoping to make $1,000 per week”.
Luckily this type of business was easy to insure with a Home Business Endorsement right on her homeowners policy. For less than $200 a year she now has the peace of mind that if somebody were to get hurt at one of her sales parties, she is covered. She also is covered if her samples were destroyed in a fire at her home.
The Home Business Endorsement is a perfect option for independent in-home sales representatives.
Insurance Agent – Jen S.