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Home business insurance: Business property vs. homeowners coverage

Home Business Insurance. The line between homeowners insurance and business property insurance can be blurry if you have a home-based business.

Your homeowners policy may provide some coverage for your business property, but limits are typically low. And it may not be enough if the value of the property is more than a few thousand dollars.

Home business insurance can help protect everything you need to run your company with much higher limits than those provided by homeowners insurance. And it offers additional protection homeowners insurance doesn’t have.

What does homeowners insurance cover?

Homeowners insurance is meant to protect your home and personal possessions.

If your house burns down in a fire or a tree comes crashing through your roof, the insurance company will help you cover costs to repair or replace your personal belongings and the physical structure of your home.

But most homeowners insurance policies only cover business property up to $2,500. So if that same tree comes crashing through your roof and destroys the equipment you use in your business, your insurer will reimburse you up to the policy’s limit for business property.

If you only need a laptop and some basic office supplies, that might be enough.

You might need business insurance if you have more than $2,500 in business equipment at your home

If you have special business equipment, office furniture, or inventory stored in your home, you probably need more coverage than what your homeowners insurance can provide.

For example, let’s say you’re a photographer and you have a studio in an extra bedroom or garage at your home. The tree destroys your camera, lighting, backdrops, props, and other equipment. If you don’t have commercial property insurance, your homeowners insurance is unlikely to reimburse you for everything you lost.

If the limit isn’t high enough to cover all the property that was damaged, you’ll have to pay the difference to replace your equipment so that you can get back to work.

If you keep business supplies somewhere other than your home, such as in your car or a storage unit, the coverage limits in a homeowners insurance policy are typically even lower.

2021 Business Insurance Trends

Name: Shield Insurance Agency
Address: 3214 Chicago Dr, Hudsonville, MI, 49426
Telephone: 616-896-4600

Posted on May 25, 2021January 23, 2025 by Shield Insurance Agency

Business Insurance Trends and Predictions for 2021 and the Impact on Your Business

BUSINESS INSURANCE

Here are a few business insurance trends that are likely to dominate in 2021, along with tips on how to position your business for growth. For small businesses across America, 2020 has been one of the most challenging years in history. Despite the coronavirus pandemic, small business owners have been resilient, pivoting and adapting their business models to navigate continually changing conditions. With the new year on the horizon, there are potential new opportunities to take advantage of and ways to adapt to challenges you may face.

1. Hard market conditions are ahead.

Due to the hit that the economy has taken in 2020 as a result of the COVID-19 pandemic, business owners must prepare for hard market conditions in 2021: this will include higher premiums. Insurance companies will likely be erring on the side of caution, introducing new coverage limits and adding new terms and conditions to policies to ensure they aren’t hit too hard by any potential further waves of Covid-19.

Although higher premiums may be in the forecast, insurance companies will no doubt double down on their efforts to add value and ensure that customers don’t look for other options when premiums rise.

2. Data-driven business insurance trends may deliver lower premiums for some.

Over time, Big Data and sophisticated models will allow insurance companies to lead with risk-based pricing at an increasingly granular level. The emergence of new risks will create new underwriting and portfolio risk management techniques as well. Data-enabled processes will minimize friction and streamline the customer insurance journey, from request for coverage to claim.

In the long run, this pricing strategy will save insurance companies money and ensure that pricing is fair. As a result, low-risk customers will enjoy lower premiums, and only truly high-risk customers will be required to pay steeper rates.

3. Value propositions will become a big part of the business insurance landscape.

Since higher insurance premiums are in the forecast, insurance companies will need to come up with creative ways to retain existing clients and earn the business of new clients. To stay competitive, insurance companies will likely bring new value propositions to the market to gain that competitive edge. This is likely to take the form of more flexible insurance offerings, including usage-based solutions.

4. More businesses will lean on captive insurance.

In 2021, business owners will continue to face pressure to reduce insurance premiums or at least battle against the rising prices. As a result, many business owners will be considering alternative insurance options such as captives.

Captives and similar alternatives have been an effective and financially beneficial way for small businesses to mitigate risk for decades, and that’s no different in the age of COVID. Captives will take a leading role in 2021 renewals and give business owners a stronger hand when it comes to negotiations with insurers. They will be at the core of companies’ risk transfer and risk management strategies.

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