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The home-based business boom has an underinsurance problem


“While it is pleasing that most owners would speak to an insurance agent about the insurance they need, with so many home-based businesses having no insurance in place, there is a huge opportunity for us to do more to help this thriving sector,” said Jill Bryant of AXIS Insurance. (Credit: Marius Venter/Adobe Stock)


Whether it was a side hustle turned full-time, a desire to be their own boss or the need to follow their true passion, in recent years many Americans have started a home-based business.

To date, there are more than 15 million home-based businesses (HBB) in the U.S., according to AXIS Capital, which found that 44% of HBB owners either don’t have commercial insurance or don’t know what they are covered for.


However, these business owners are not unaware of the issue. More than 90% recognize they need insurance. Additionally, 37% said they weren’t confident on where to look for an HBB insurance policy.


This suggests insurance companies and agents haven’t kept up to speed with the needs of HBBs, according to Jill Bryant, head of small specialty commercial at AXIS Insurance.


“Despite the uncertain climate, home-based business owners are incredibly optimistic about the future. With almost half of all respondents confidently expanding their businesses, our research also suggests that many would welcome more support,” Bryant said in a release. “There is certainly more the insurance industry can do to help these entrepreneurs realize their ambitions by educating business owners about the benefits of insurance and the appropriate coverages for their unique needs.”


And while these businesses might be based in a home, 49% of these HBB owners spend half of their time working away from the home. Bryant noted this means they need insurance that “goes with them.”


Further, those that turned a side hustle into a full-fledged business might not have considered all the risks, such as professional liability or crime, which are unlikely to be covered by a home policy.


“While it is pleasing that most owners would speak to an insurance agent about the insurance they need, with so many home-based businesses having no insurance in place, there is a huge opportunity for us to do more to help this thriving sector,” Bryant said.

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