Starting a home-based business in Central New York brings both excitement and questions about insurance. As you set up your operations, the cost of coverage often creates uncertainty. How much will it actually cost? What drives the price up or down? Making uninformed decisions about business insurance could leave you with a policy that doesn't quite fit your situation.
At the Horan insurance agency, we work with home-based businesses throughout Central New York to help them understand insurance costs and explore coverage options. As an independent agency working with multiple carriers, we can discuss different policy approaches and pricing factors based on your specific business situation.
In this article, we'll explore the four main factors that affect insurance costs for your home-based business, how each factor influences your premium, and what you can do to make informed coverage decisions that fit your budget and risk level.
Factor 1: The Type of Home-Based Business You Have
The type of business you operate will have a big impact on the cost of insurance. Businesses that pose a higher risk, such as daycares and dog groomers, will pay more for insurance than businesses that pose a lower risk, such as piano teachers.
This is because higher-risk businesses are more likely to face claims or lawsuits from customers, employees, or third parties.
For instance, if you run a daycare in your home in Syracuse, you may be liable for any injuries or damages that occur to the children under your care. If you’re a dog groomer in Ithaca, you may be responsible for any harm or loss that happens to the pets you groom.
On the other hand, if you’re a piano teacher in Utica, you may have less exposure to such risks. Therefore, your insurance cost will depend on the nature and scope of your business activities and the potential hazards they involve.
Factor 2: Seeing Customers or Clients at Your Home
If your business requires customers or clients to visit you, your general liability premiums will be higher. This is because you’re more exposed to the risk of someone getting injured or damaging their property in your home or on your premises.
General liability insurance covers your business from claims of bodily injury and property damage to customers and clients.
To put that into perspective, let’s say you run a yoga studio in your home in Manlius. You may have to pay for medical bills or legal fees if a customer slips on the ice in your driveway and breaks an arm.
Say you run a pottery studio in your home in Marcellus but teach clients one-on-one in their homes. If you spill glaze on a client’s carpet and stain it, general liability insurance can cover the cost of cleaning or replacing the carpet. It can also cover the legal fees and settlement costs if you’re sued for property damage by a third party.
Therefore, your insurance cost will depend on:
- the amount of traffic and activity your home-based business generates
- the potential hazards those visits pose, and
- the possibility of causing damage or loss to the property of others
Factor 3: Other People’s Property
CNY businesses that take the property of others for repair, like bikes, musical instruments, or computers, need to be careful. If something is damaged while in your care, you could be held liable for the cost of repairs or replacement.
Say you run a bike repair shop in Cortland, you may have to pay for a new bike if it were stolen from your shop. If you teach violin to students in Rome, you may have to cover the cost of a new violin if you drop one while tuning it.
It’s the same for a computer technician in Auburn. You may have to reimburse a customer if you lose their data while repairing their laptop.
Therefore, your insurance cost will depend on the value and fragility of the items you handle and the possibility of causing damage or loss to them.
What About “Property” That Lives and Breathes?
Another example of a CNY business that takes the “property” of others for “repair” is a dog groomer. If you groom dogs in Oswego, you may have to take care of the pets and furry companions of your customers while they’re away.
This means you’re responsible for the safety and well-being of these animals. If something happens to the pets while in your custody, such as injury, illness, or escape, you could be sued by the owners for negligence or breach of contract.
This all adds an increased liability exposure to your business and affects your insurance cost.
Factor 4: Your Inventory or Business Property
Another factor that affects your insurance cost is the amount and value of your inventory or business property. This includes any items you use for your business, such as
- tools
- equipment
- furniture
- computers, or
- supplies.
Let’s say you’re a soap maker who has $5,000 worth of inventory prepared for the holiday season. You store your inventory in the basement of your Fayetteville Colonial, where you also have your soap-making equipment and supplies.
But a fire breaks out in your basement and destroys everything while you’re away on business. Without business property coverage, you would have to pay for the loss of your inventory and equipment out of pocket.
If your business property is damaged or destroyed by a fire (like in the example above), a burst pipe, theft, or any other covered peril, you may have to replace them out of pocket. To avoid this, you can add business property coverage to your general liability policy.
This coverage will help you pay for the repair or replacement of your business property up to a certain limit. The more business property you have and the higher its value, the more coverage you’ll need and the higher your insurance cost will be.
Therefore, you should assess your business property needs and choose a coverage limit that suits your budget and risk level.
Finding Coverage for Your Home-Based Business in Central New York
Many factors affect the insurance cost for your home-based business in CNY. Understanding these factors allows you to make informed decisions about coverage options that address your specific business risks and exposures.
Starting a home-based business represents a significant achievement. You manage marketing, accounting, customer service, and product development while handling the uncertainties that come with being your own boss. Your hard work deserves coverage that addresses your unique business situation.
The Horan insurance agency works with home-based businesses throughout Central New York. Once we understand your business operations, we can help you explore policy options from multiple carriers based on these variables. Our experience with various business types means we can discuss coverage approaches that fit your specific situation and budget.
We can also provide information about related coverage options, such as commercial auto, commercial auto, cyber liability, professional liability policies.
Click the Get a Quote button below to begin exploring your options. One of our licensed insurance agents will reach out to discuss coverage that fits your home-based business.
