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4 Factors That Affect the Cost of Home-Based Business Insurance in CNY

June 2nd, 2023 | 5 min. read

By Daniel J. Middleton

If you’re starting a home-based business in Central New York, you’ll need insurance to protect yourself and your property from unexpected losses.

The cost of insurance will vary depending on a number of factors that affect the risk and exposure of your business, including the type of business you operate, whether you see customers at your home, whether you handle other people’s property and the amount of business property you have.

Our agency has written policies for home-based businesses and larger commercial enterprises over the years. In that time, we’ve narrowed down the main elements that impact the price of policies for home-based businesses.

In this article, you’ll learn about the four factors that affect the insurance cost for your home-based business:

  • Factor 1: The Type of Home-Based Business You Have
  • Factor 2: Seeing Customers or Clients at Your Home
  • Factor 3: Other People’s Property
  • Factor 4: Your Inventory or Business Property

You’ll also get some tips on how to choose the right insurance policy for your specific type of business and how to reduce your risk and exposure.

After reading to the end, you’ll have a better understanding of how to protect your home-based business from potential losses and liabilities.

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.

Don’t Let Your Home-Based Business Go Unprotected

As demonstrated, many factors affect the insurance cost for your home-based business in CNY. By understanding these factors, you can make informed decisions about the type and amount of coverage you need to protect your business from unexpected losses and liabilities.

Don’t let your home-based business go unprotected. You’ve worked hard to reach this point, and we’d hate to see you jeopardize your dream. Following these tips can save you money on home-based business insurance and help you obtain coverage that will safeguard your assets and leave you abundant peace of mind.

Being an entrepreneur is a monumental achievement. You have to juggle many tasks and responsibilities, from marketing and accounting to customer service and product development. You also have to deal with the uncertainties and risks that come with being your own boss.

That’s why we want to help you protect your hard-earned assets and income from unexpected losses and liabilities.

We’re here for you. Once we get an understanding of your home-based business, we can tailor a policy based on the variables.

We have the experience and expertise to help you get the right coverage at the right price. Click the Get a Quote button below to start the journey. One of our insurance specialists will reach out to you to discuss your policy options.

We can also help you with other insurance needs, such as commercial auto, cyber liability, professional liability, and more. Learn more about these policies and how they can protect your business.

Daniel J. Middleton

Daniel is an accomplished content creator. He has been working in publishing for almost two decades. Horan Companies hired Daniel as its content manager in November 2022. The agency entrusted its messaging to him. Since then, Daniel has written insurance articles, service and pillar pages, and more. All in an effort to educate CNY readers. He's helping them understand the world of insurance so they can make informed decisions.