insurance coverage

Home-Based Business Owners, You Need Insurance Coverage

When you start a home-based business, buying insurance may not be your first priority, but you cannot afford to ignore it either. When the unexpected happens -- and it will -- having insurance coverage may mean the difference between the success and failure of your home-based business.

You may not require all types of insurance listed here, but taking some time now to consider your insurance needs can save you money and headaches in the future. Ultimately, after reading this article, the best way to determine your complete needs is to consult with your insurance agent. Explain to them the details of your home-based business and he or she should be able to determine the best insurance coverage for you (and any employees).
Health Insurance

Health insurance should be the first consideration for yourself and any employees you may have. If you have just left your current job to start your own business, you may be eligible for COBRA, which will provide temporary interim coverage. This will keep you covered while you search for the best health insurance policy.
Disability Insurance

Disability insurance will guarantee that you have some income should you suddenly become unable to work because of injury or illness. Having this extra peace of mind is almost always well worth the extra money you pay.
Life Insurance

Life insurance will help ensure that your family has the money it needs should you meet with an untimely death. Some lenders require that you have life insurance before they'll issue a loan; this guarantees that the loan will be repaid if you meet with an untimely end.
Business Property Insurance

Business property insurance helps protect you against loss of inventory or equipment. If your business equipment or inventory is damaged in a flood, fire, or other disaster, this type of insurance will allow you to recoup your losses.
General Liability Insurance

Comprehensive general liability insurance is necessary for your home-based business if you plan on having clients or customers visit your home. Whether you plan to hold meetings, allow customers to pick up merchandise, or have members of the public enter your home for any other reason, this insurance will protect you if someone is injured while on your property. This insurance will typically pay for your legal defense should you face a lawsuit as the result of a fall or other damage that occurs on your property.
Business Interruption Insurance

Business interruption insurance will help your business recover from natural disasters. It will cover you for income lost during the disaster, and will pay for operating expenses that continue to accrue, even though your business isn't up and running.
Workers’ Compensation Insurance

Workers' compensation insurance is an absolute necessity if you plan on having employees working out of your home. Without workers' comp, you'll be responsible for any medical expenses arising from injuries employees sustain while working for you. Many home-based business owners mistakenly believe that this type of insurance is only required by businesses that have a retail or separate location, but that's not the case. Another mistake is assuming that only ‘dangerous’ employers (such as construction or movers) need this type of insurance. But what if your employee slips on the stairs or their chair breaks? While those are both unlikely, they are possible and the less risky your business, the cheaper the insurance will be.

These insurance plans can help ensure that you are prepared to face any eventuality that might occur while you are running your own business. Disasters, accidents, and crises can strike at any time. By preparing now, you may be saving you and your company significant financial loss, wasted time, and difficulty.

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Lessons For The Insurance World

Lessons For The Insurance World

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Jay Himmelstein’s compelling Narrative Matters essay about his niece’s illness and the limits of her student health insurance program presents important lessons for those of us working to ensure adequate economic access to necessary and appropriate health care for college and university students.

Because it is the colleges and universities that decide both their institutional requirements for students to have adequate coverage and the level of benefits for the university-sponsored plan (including plan limits, coinsurance, and deductibles), I sent Himmelstein’s essay to more than fifty campus student health leaders. In my cover note I wrote: "If there are lessons here for the insurance world, they are two: (1) Voluntary plans are problematic because of risk selection, and (2) plan limits for this basically healthy population might harm only a few people, but their physical suffering will be significantly compounded by economic worries, and they might forgo necessary care."

I received extremely positive responses from many of these student health leaders. As evidence of how important Himmelstein’s essay is, let me quote from one of the responses: "It is a very a timely article for us as our university administration and graduate school are currently looking at ways to reduce the cost of student health insurance.... I am afraid they are going to suggest reducing or limiting the benefits of our excellent plan, meaning that what I read in this essay could very well happen to one of our students. I am going to distribute copies of this essay it to our Student Health Insurance Advisory Committee. Thanks for sending it."

In turn, I say thanks to Health Affairs and Himmelstein for this important—and clearly timely—essay.

Stephen C. Caulfield
The Chickering Group, an Aetna Company, Cambridge, Massachusetts