Pennsylvania Urges Proper Coverage for Home-Based Businesses

Pennsyslvania Insurance Commissioner Jessica Altman is encouraging small business owners to ensure they have proper coverage and know how to file claims after storm damage.

“Many Pennsylvanians run businesses out of their homes, but many may not have the insurance coverage they need to protect their investment and their income,” Altman said in a press release issued by the Pennsylvania Insurance Department.

A survey by the Independent Insurance Agents and Brokers of America showed nearly 60 percent of home-based businesses surveyed did not have proper business insurance coverage.

Home-based business owners should not rely on their homeowners’ coverage to protect their business, Altman said in the release. The Pennsylvania Insurance Department has noted that many homeowners’ policies cover only up to $2,500 for damages to business property. Homeowners’ policies also may not provide coverage if a customer or employee gets hurt at the home-based business property, for lost income because of damage to the home or if a client’s data is stolen.

There are several other questions home-based business owners should consider when deciding on the coverage needed to protect their business, Altman stated in the release, including whether business equipment or inventory is stored at the home, if customers visit the home or items are delivered to the home, or if vehicles are driven for the business.

“I encourage home-based business owners to conduct an inventory of equipment, furniture, and everything used to operate the business, then meet with an insurance professional to make an informed decision on what protection is needed,” Altman said in the release.

The Insurance Department also released tips for owners whose business is damaged by a storm.

“Business owners should contact their insurer as soon as possible after their property is damaged by a storm, follow instructions from the insurer, and keep a record of people to whom they spoke,” Altman said in the release. “Also, keep all receipts, and provide the insurer all information needed to avoid delaying payment of a claim.”

The Pennsylvania Insurance Department also advised business owners to take photographs or video of damage before beginning clean up or repairs. It stated that business owners should keep track of damage to the business property, damage to property owned by others but that is in the care, custody or control of the business, lost business income and extra expenses caused by the claim.

Altman said in the release that business owners should make repairs necessary to prevent further damage, but not make any permanent repairs before the insurance company is able to inspect the damage and approve the repairs. She also said owners should not rush to settlement and be prepared to negotiate with their insurer if repair estimates differ.

If a claim is denied, business owners should review their policy and may file an appeal with the insurance company’s claim manager. Business owners can also contact the Insurance Department’s Consumer Services Bureau.

Source: Pennsylvania Insurance Department