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insuring a home based business

Insuring a Home Based Business

“Do I need liability insurance for an e-commerce store? What should I consider when insuring a home based business?”

There are approximately 14,000,000 home-based businesses in the U.S. Many people choose this type of business because they love the flexible hours, the lack of commute, the comfort of working in their pajamas, and the added benefit of saving money.

“Since I don’t have a warehouse or storefront,” they determine, “I can spend less on rent, taxes, and insurance. Right?”

Unfortunately for these uninformed business owners, that is simply not true.

Home-based businesses—whether the customers come to you, you go to them, or the business is completely done online—are not exempt from needing insurance.

And if you think you’re off the hook because you have insurance on your home, think again.
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Do I Need Flood Insurance? (In short: yes!)

Does My Homeowner’s Policy Cover a Flood?

Whether it’s mortgages or storm damage, it’s never a good thing when your home is underwater. But how can you make sure that your property will be protected when the next Big Storm strikes?

If Harvey and Katrina have taught Americans anything, it’s that flood insurance can make or break your cleanup efforts after a catastrophic incident. You may have even seen the ads on TV warning you against relying solely on your homeowners policy for flood coverage.

“Yeah,” you might be asking. “It’s nice to have. But do I need flood insurance?”

 

Yes. You Do Need Flood Insurance.

aerial shot of flooded suburban neighborhood

Your standard homeowner’s policy will cover some damage from rain, but not a true “flood” in the way that FEMA defines it (more on that later). In order to protect yourself against floods caused by heavy rainstorms and other natural disasters, you’ll need to purchase flood insurance backed by the National Flood Insurance Program (NFIP).

But before you decide to take your chances and save a few bucks on your insurance premiums, you’ll need to do a little research. If you live in a designated flood zone (or if you’re about to move into a house located in a flood plain), you will need to have flood policy before your lender will approve the loan.

And just because you didn’t need flood coverage when you first moved in doesn’t mean you’re off the hook. Flood maps change and evolve all the time since construction, erosion, and other factors all affect water runoff and flood risk.

To find out whether you live in a designated flood zone, click here.

However, even if your property is high and dry, it’s still worth considering carrying excess flood insurance. According to FEMA, more than 20% of flood claims originate from properties outside a flood zone. You just never know when a heavy rain storm will cause a nearby body of water to overflow its bounds and creep into your property.

Even if you don’t have a river, lake, or retention pond nearby, remember that Florida is riddled with underground aquifers. If too much rain fills them up, you’re looking at groundwater seepage that leads to the type of flooding your traditional homeowners insurance policy won’t cover.

What Is a “Flood”?

street sign nearly submerged with floodwaters

FEMA has very strict guidelines for what is considered a “flood” or not, and this is the definition that your flood insurance carrier will abide by when deciding whether or not to cover your claim.

FEMA defines a flood as:

  • Flooding of two or more acres of normally dry land area or of two or more properties (at least one of which is your home);
  • Overflow of inland or tidal waters; or
  • Unusual and rapid accumulation of runoff of surface waters from any source; or
  • Mudflow; or
  • Collapse of land along a shoreline as a result of erosion “exceeding anticipated cyclical levels.”

Water damage inside your home as a result of a busted water pipe or sewer backup is not considered a “flood” and would likely be covered under standard homeowners policies.

 

How Flood Insurance Works

pile of sand bags

The NFIP was created in 1968 after the National Flood Insurance Act was passed. This government subsidized program helps to control flood insurance costs to make flood insurance affordable to everyone.

In fact, as you call around for flood insurance quotes, you’ll likely find that premiums are pretty much the same across the board. The average price is only around $600 a year.

The NFIP has two policies available, one that covers your home’s physical structure up to $250,000 and one that covers your possessions up to $100,000. You can purchase both of these policies or only one. You can even purchase excess flood insurance if you need coverage beyond $350,000.

 

Conclusion

Flood insurance is not covered under your standard homeowners policy, but that doesn’t mean it’s “optional.”

Floods can happen anywhere, at any time, even if you’re not located in a high-risk flood zone, and the only way to recoup any flood loss is with a flood insurance policy. These policies are an affordable, government subsidized way to protect against catastrophic flooding that could leave you underwater in more ways than one.

Flood insurance is affordable, but flood damage is not.

To get a flood insurance quote, call a local independent insurance agent.

Does your business need insurance even if you run an LLC out of your home? Yes!

Does Your Business Need Insurance?

Let’s say you run a small business from your home. You don’t have employees; customers don’t come into your store (so no risk of them slipping on a wet floor and suing you); and your custom-designed hair bows aren’t going to injure anyone. Does your business need insurance?

In short, yes.

No matter how safe your business is—or how careful you are—there’s no such thing as a “risk-free” business.
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What Are Commercial Bonds?

What Are Commercial Bonds and Why Would I Need One?

Many times a client will come to me questioning why someone is requiring them to have a commercial bond. This article will provide some information to help explain what commercial bonds actually are, who they are protecting, and what types of commercial bonds are most commonly written.

Bonds function much like insurance in that they guarantee that obligations are fulfilled. If a promise is breached, the bond will pay to fulfill the promise. There are generally 3 parties: The bond holder (principal), the party for whom the work is being done (obligee), and the company providing the bond (surety company).

The two most common bond types are Surety Bonds and Fidelity Bonds. The basic difference is that a surety bond protects the public. A fidelity bond is employee dishonesty insurance coverage. In a nutshell, if someone is requiring you to provide a bond, you are looking for a surety bond. If no one is requiring the bond, you are more than likely looking for a fidelity bond.

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Think your small business won't be affected by cyber crime? Think again! Find out how to protect your small business from data breach and cyber ransom.

How Data Breach and Cyber Ransom Threaten Your Small Business

When it comes to insurance, most people think about protecting physical objects from loss or harm, but there’s something else—something vital—that your small business needs to put under lock and key: your data.

“But Data Breach and other types of cyber crime only happen to giant firms like Dairy Queen and Target. I don’t have the kind of records the bad guys want. Plus, who would even think to target little ol’ me?”

Every day, insurance professionals hear comments like this from their clients. But the truth is, data breach and cyber ransom issues effect an ever-increasing number of small businesses (that is, firms under 100 employees) in the United States. Often, these victims are “Mom & Pop” operations with under 20 employees. In fact, small businesses are actually the perfect target for cyber criminals.
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medical payments in auto insurance

What Are Medical Payments and Why Are They On My Auto Insurance Coverage?

Sifting through all of the different coverages that are part of insurance policy can be a very confusing task. There are things that pay for injuries to you. There are parts that pay for injuries to others. There are coverages that pay for damage to your belongings. There are elements that pay for damage to other peoples’ things. The list goes on and on. Today we’re going to look at Medical Payments and how they can help you avoid costly fees after an accident.
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Are You Hurricane Ready?

Even though Hurricane Matthew’s exact path is still uncertain it is better to be prepared than to be caught without a plan! Harry Levine Insurance is here for you if and when the storm strikes. As insurance professionals our job is more than just showing up to the office every day. Our job is to be there for our clients when they are in their most difficult moments.

We urge you to adopt a Hurricane Preparedness Plan (see below). We urge you to monitor the storm. We urge you to take photos of your home and belongings and to find your insurance policies. Keep them dry and safe! You will find a listing of all of our insurance company partners’ claims contact information here on our website. Please make a note of your carrier’s contact information.
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Workers Compensation – The Pitfalls of Trying to Cut Costs

As Workers Compensation rates in Florida soar, with more potential double digit rate increases looming, small businesses are trying to find creative ways to cut their costs on workers compensation coverage.  The end result can be very costly for the business owner. Some people are trying a new, creative way to cut costs and that is to report lower than actual payroll, so that the initial cost will be lower. There are agents out there that will allow this, and will sometimes encourage it to get your business in the door.  Don’t do it. It is a trap!
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Windshield Repair Fraud

If it’s too good to be true, then it is!

A problem that not many people talk about in the insurance world is windshield repair fraud. If your automobile glass cracks or gets chipped, it is very important to get it fixed. The State of Florida even makes it easy by requiring that insurance companies waive deductibles for windshields if you have Comprehensive Coverage as part of your car insurance policy. That’s right, if you have coverage, then you have an automatic deductible of zero for your windshield. Repairing or replacing a damaged one can be free!
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