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Bruce Sackrison

Bruce Sackrison is a Napa Valley Register columnist who will write about property and casualty insurance matters.

J.L. Sousa/Register

Are you running a business from home?

Got insurance for that?

There are more than 3 million businesses in California. According to the Small Business and Entrepreneurship Council, 52 percent of them are home-based businesses.

That’s well over a million home-based businesses!

So, it’s likely that many of my readers in Napa Valley are running a business from home, or you know someone who is. And that’s what makes my topic this week so important.

The tale of Awesome Adam and the Trippy-Toes customer

Adam just opened a small engine repair shop called Awesome Adam’s Repair Shop. And Adam is truly awesome. He can fix just about anything, and he’s a nice guy too. (Plus, he’s fictional and bears no resemblance to any living person.)

Adam always wanted to run a business out of his home. First, he contacted the city before opening his business and obtained all the proper zoning and licensing. (Good job, Adam!)

Then he also made sure that his licensing with the state was in order. Awesome Adam knows that you can’t be too careful.

Oh, and insurance?

Yes, Adam believes in good insurance. So, he will call his agent “later” and take care of that. Besides, he has homeowners coverage — that should be good enough for now, right?

He hung out his sign in his front yard, and waited for his first customers.

Unfortunately, Adam’s first customer was “Trippy-Toes.” (He’s also fictional.)

Trippy-Toes drove up Adam’s driveway and around to the side door of the shop. He got out of the car holding three weed-whackers, two leaf blowers, and a partly disassembled lawn mower engine. He was overloaded and distracted.

As he stumbled up the driveway, he failed to see the large crack in the pavement that Adam had been meaning to fix. (Even fix-it men have things that need fixing.)

Trippy-Toes tripped.

He fell hard, and broke several things… on his body. He was in the hospital for two weeks.

Trippy-Toes sued. Adam’s homeowners insurance denied this business-related claim. Suddenly, Awesome Adam wasn’t feeling so awesome.

What every home-based business needs… right now.

If you operate a business out of your home, you almost certainly need more than your standard homeowners insurance coverage. Yet many small business owners aren’t aware of this.

Why do you need additional coverage?

First, most standard homeowners policies do not provide any business-related liability protection when a business owner has more than the “occasional” customer or delivery-person coming to their door.

What is “occasional?”

The insurance company decides this, usually after a claim is filed. You don’t want to be in the situation where the insurance company is deciding the answer to that after someone is hurt.

If you have customers coming to your door, you need additional coverage.

Second, most standard homeowners policies provide very little coverage for business equipment or tools. Typically, it’s $2,500 or less. In a situation like Awesome Adam’s, the homeowner/business owner can have thousands of dollars of tools and equipment that might not be covered.

Finally, some home-based businesses are specifically excluded from homeowners policies. This includes any food-based businesses, personal care products, and others.

My advice:

If you have a home-based business, talk to a local agent who is experienced in these matters. You most likely will need at least an endorsement to your current homeowners policy. Often, that can be enough. Or, you may need a separate Business Owners Policy. See my previous column on that topic.

You might be surprised to find out just how affordable and simple it can be.

Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates. He is at 707-931-0186 or