Home-based Business Insurance

I do not sell insurance.  I do buy insurance.  However, as a lawyer, I know that insurance companies do not look out for you when you make a claim.  In fact, one of the first things they look for is a reason they can use to deny your claim.  My friends in the insurance industry may take objection to this comment, but the number of lawyers earning a living trying to defeat insurance claims is proof.

I recently read a case where a babysitter was sued for negligence.  The woman lived at home, caring for her own children and for a neighbour's child during the day.  She was paid $150.00 per week.  While walking down the stairs, she dropped the child.  The parents sued, and she made an insurance claim.

The insurance company was successful in denying coverage, because she was using the premises for business purposes and had not purchased anything other than the normal homeowner policy.  As a result, she will be personally liable for whatever amount of damages the court determines is owing.  It will likely be a lot more than the $150/week she earned.

Small and home-based business is an important part of our economy.  For those of you that conduct business in your home, failure to obtain the proper insurance could doom you to the same fate as the babysitter.  This fate is not limited to liability for injury on your premises.  Business equipment is not normally covered under your homeowner policy.  So, if your PC and other equipment are stolen or destroyed by fire, for example, your insurer may deny coverage to replace them.

No-one like to pay more in insurance premiums, but it is worse to be denied coverage when you have to make a claim.  Protection from liability is too important.