Brenda McGilloway of Kick Stands Up Biker Shop on Simpson Road was part of the CJ Directory annual Home-Based Business Event at the Quesnel and District Seniors’ Centre. Lindsay Chung photo

Brenda McGilloway of Kick Stands Up Biker Shop on Simpson Road was part of the CJ Directory annual Home-Based Business Event at the Quesnel and District Seniors’ Centre. Lindsay Chung photo

Home based businesses in for home insurance increase

Home based businesses require changes to home owner insurance

During the pandemic, home-based businesses have flourished. Home-based businesses of all kinds have been a way for individuals and families to pursue income from home during lockdowns and job uncertainties.

If not properly researched, however, business owners could be putting their home insurance at risk.

In Smithers, as it is across the country, many of these businesses are run by women. In speaking with people that have started businesses in the last two years, they range from hairstylists, to dog walkers and groomers to child care workers to bakers and people selling their wares online.

None wanted to speak on the record for fear of putting their own insurance policies at risk, but in general, the ones who have taken out new business policies saw their insurance costs double.

Most of those interviewed were unaware that having a home-based business required additional insurance for their home.

A home-based business can require a business license, depending on the jurisdiction and what kind of business. And if the business is selling products, has inventory, has clients, or is producing commercial products in the home, entrepreneurs could be in for a big surprise when their home insurance policy comes due.

General home insurance covers home, contents, and outbuildings for most disasters. But a homeowner’s policy could be nullified if a business does not have business coverage.

Insurance companies have been hit hard with claims to homes from everything from wildfires and floods to artic outflows.

“Insurance companies have paid out billions of dollars annually in claims in recent years, policies have gone up, and companies are more strict,” said Debby Shuhyta, insurance agent for Western Financial Group in Houston.

“Many people think their homeowner’s policy is all they need. But a typical homeowner’s policy may not provide enough coverage and most homeowner’s policies specifically exclude business liabilities.”

What insurance companies are requiring is not an add-on to home insurance policies, but rather a separate policy covering commercial activities. Whether it’s an in-house barber, tattoo parlour, or bakery, owners can decide how much home business insurance they want.

“People that operate businesses out of their home are required to carry separate liability and property policies to cover liability and contents associated with the business,” said Jamie Kula at KRG Insurance Brokers. “Costs depend on many variables including type of operations, revenues, experience, value of contents and limits of liability, but I would say the minimum premium could start at $1,000 annually.”

Taking a risk, and not properly insuring a home business, can be a financial disaster should a fire break out or a client fall in the driveway, or any number of other things happen where you can personally be liable. Research and a call to a local insurance agent can help make sure your business and house are covered.

 

Victoria-based mask-making business, The Kindness Project, has outgrown the founder’s home office and is moving into a new workshop on Hillside Avenue. (The Kindness Factory website)

Victoria-based mask-making business, The Kindness Project, has outgrown the founder’s home office and is moving into a new workshop on Hillside Avenue. (The Kindness Factory website)

Business woman having a video call with coworker, working online from home at cozy atmosphere. Concept of remote work from home

Business woman having a video call with coworker, working online from home at cozy atmosphere. Concept of remote work from home

Kavin Joanette plays with his dog Messier at his home in Val Caron, Ont. on Wednesday, Sept. 29, 2021. Joanette was one of 39 miners trapped at Vale’s Totten Mine. THE CANADIAN PRESS/Gino Donato

Kavin Joanette plays with his dog Messier at his home in Val Caron, Ont. on Wednesday, Sept. 29, 2021. Joanette was one of 39 miners trapped at Vale’s Totten Mine. THE CANADIAN PRESS/Gino Donato