izzi81

We just had a house built and moved in last week (yay!). Now we need house insurance and I've phoned round a couple of places so far for quotes. One didn't really ask about business stuff, the other asked quite a lot of questions. I run a couple of small businesses from home. One is web design, which I do very sporadically, and the other is craft supplies. I only sell online, no one ever comes to the house, and I don't make a lot of money from it. I don't keep a lot of inventory here and I've never bothered to have it insured in the past. But when the business stuff came up with the second company it was like opening a can of worms! She asked if I sold to people outside of Canada, and when I said yes (it's an online business, I sell to quite a few people in the USA) it became too complex for her to deal with and she'd have to put me through to the 'speciality team'!!! Because I sell some beads to people in America? And that affects my house insurance?How? Why?

I don't understand. Am I better off just not mentioning the business as it's so small? Nothing I do for the business is going to affect the house. At the moment I'm not even sure how long I'm going to keep it running (now the house is built I've promised myself time to really think about career directions).

Anyone have any advice or encountered anything similar?

dbd33

I know that Home Based Business is a standard optional addition to home policies with at least one company and that the premium for the type of business you describe isn't very much at all; people visiting, potentially injuring themselves, is the insurer's worry and that doesn't apply. Perhaps you need a firm to cooperate with you on filling in the forms?

izzi81

I wonder if it was the particular company I was speaking to (Johnson), or even the particular woman I was on the phone with (I didn't fill out any forms it was all over the phone), she did seem to struggle to grasp the concept of having a house built rather than just buying one which didn't fill me with confidence at the start!

I do have another broker to contact tomorrow so I'll see what they say. Can you see any logic to the 'sales outside of Canada' adding some major complexity?

dbd33

Nope. The application form I've seen asks about visitor traffic, nothing about the source of revenue.

Siouxie

I have TD Home insurance with the add on of a home based business. I don't have anyone come to the house either, it's all online, the premium is added to my normal home insurance and doesn't amount to much. I do seem to recall a question about International business but as the part that is international is only providing a service and not a product, this didn't affect me.

Aviator

Liability exposure. A home based business add on is the cheapest option. Not all HBB can be covered this way and you would then need a commercial policy.
Risky, may void insurance altogether. Always best to tell insurer anything that may affect insurance.

That is not how the insurer looks at it. Also still potentially a liability risk, especially selling into the US.

Get advice from an insurance broker.

wonderwoman

Second, that it's the liability issue, if some kid in the US chokes on one of those beads you sold momma, 2 million doesn't seem much for a lawsuit....and definitely tell your potential insurer, otherwise it could be non disclosure, and that would suck if it voids your insurance 😀

izzi81

But how does that come under house insurance, wouldn't that be business insurance? I totally understand choosing to have that kind of insurance for the business, but I don't quite see how it's connected to house insurance which I thought covered if the house was broken into or burnt down or if a tree fell on it.
(if I'm honest this just seems like one of those insurance deals where they get to squeeze as much money as possible out of you...).

Aviator

Business run from the house changes risk. If something you do in your business causes harm, or injury, liability is an issue. This could be to a customer, a courier, or the postie delivering business mail, or supplies.

If something you do during the course of the business causes a fire, or you get broken into and business supplies stolen, this is a business risk.

The cheapest business insurance is a home based business rider if you can get it. If not the only option is a commercial policy, depending on the business, could be around $800.

Without coverage, as stated before the homeowner runs the risk of invalidating their insurance and being personally liable. A home insurer may also require the home owner to have business insurance, or they won't cover the house for personal risk either.

Get advice from an insurance broker.

wonderwoman

Great post ^

dbd33

It's a bit old womanly.

The purpose of the HBB coverage is just to deal with issues resulting from the business being in the home; the courier slips and falls, the house burns down taking the business supplies and records with it. It's not a business liability policy, there's no intent on the part of the insurer, nor I imagine, the insured that there be coverage for remote bead swallowing liability, contingent loss, malpractice, E&O or any other commercial liability whether local or remote.

In buying and selling insurance the parties involved both have to look at likelihood vs. premium. It may that Aviator is willing to shell out to have millions in liability coverage on his cars, house(s) and businesses but the rest of us have to balance sensible coverage vs. grocery money. All that's needed in this case is the simplest policy endorsement so that:

- events that may reasonably be expected to happen but would be too expensive to pay for as an individual are covered (the tumbling courier)

- the insurer knows there's a business and doesn't decline a house claim for non-disclosure

The latter isn't much of concern with an online business; what's the practical difference between surfing the internet and, say, designing websites? it would be a concern with, say, a blacksmith's forge in the garage.

Aviator

http://www.ibc.ca/pe/business/busine.../home-business

Novocastrian

Very subtle.