Securing Your Home-Based Business: Essential Insurance Insights with Ezekiel Hudson

Have you ever wondered if your homeowner's insurance is enough to protect your home-based business? Join us as we pose this critical question to our expert guest, Ezekiel Hudson, who helps us navigate the complexities of home-based business insurance. Ezekiel sheds light on the limitations of standard homeowner's policies, especially when it comes to business activities. We discuss scenarios where you might find yourself underinsured, like client accidents on your property, and the financial implications of such risks. Through this episode, you'll gain crucial insights into why specialized business insurance is essential for safeguarding both your personal assets and your business.

Explore the various types of home-based business insurance with us, from affordable homeowners policy endorsements for low-risk businesses to comprehensive in-home business policies and all-inclusive business owner's policies (BOP). We'll break down each option and highlight additional coverages like professional liability insurance, helping you understand what might suit your specific needs. By the end of our conversation with Ezekiel, you'll be equipped with the knowledge to make informed decisions about your coverage, ensuring that you can focus on growing your business without worrying about being inadequately insured. Tune in and take the first step in protecting your entrepreneurial journey.

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Transcript

Understanding Home-Based Business Insurance

Speaker 1 0:00

So if you're one of the many people out there running a business from home, you've probably at some point stopped and thought wait, hold on a second. Yeah, Does my homeowner's insurance actually cover this?

Speaker 2 0:14

Right.

Speaker 1 0:14

And it's a great question to ask.

Speaker 2 0:16

Yeah.

Speaker 1 0:16

And today we are going to dive into that. We're going to really get into the weeds of home-based business insurance, using Ezekiel Hudson's guide as our kind of roadmap for this.

Speaker 2 0:30

Okay.

Speaker 1 0:31

And we really want to make sure that we are giving you the information that you need as someone who is either running a business from home or thinking about it. To make sure that you're making smart decisions, right About protecting yourself, your business from home.

Speaker 2 0:41

Right.

Speaker 1 0:42

Or thinking about it.

Speaker 2 0:43

Mm-hmm.

Speaker 1 0:43

To make sure that you're making smart decisions, right Mm-hmm About protecting yourself, your business.

Speaker 2 0:48

Absolutely.

Speaker 1 0:48

And to help me decode all of this, we have our expert here.

Speaker 2 0:52

Happy to be here.

Speaker 1 0:53

Who can break down all this insurance jargon?

Speaker 2 0:56

Yes.

Speaker 1 0:56

Into something that we can all understand.

Speaker 2 0:58

Love to. I try my best.

Speaker 1 1:07

Because let? Because let's be honest yeah, insurance. Sometimes it feels like oh yeah, it's written in a whole other language a foreign language?

Speaker 2 1:10

for sure really does.

Speaker 1 1:10

It's designed to be confusing it is most people don't read it exactly it's great to be here yeah, and it's one of those things where you just kind of hope for the best right and sometimes that's not enough it's not enough so I think a lot of times people just assume well, you know what, I have homeowners insurance.

Speaker 2 1:26

Oh right.

Speaker 1 1:27

I'm good.

Speaker 2 1:28

Right, right, exactly.

Speaker 1 1:29

Like, if something happens in my home, my homeowners insurance will cover it. But as we know, especially when you bring a business into it, it's not always that simple, is it?

Speaker 2 1:39

No, not at all. Yeah, you know a lot of people they think, hey, if I have a home-based business, my homeowners insurance has got me covered right. But it's usually not that straightforward. Let's say you're having some clients over, right, okay, and they trip over a laptop cord, maybe during a meeting okay that's where things get a little right, because that feels very no right right like that could happen, like absolutely yeah, suddenly we're in a different. You're in a different territory now.

Speaker 1 2:07

Territory yeah.

Speaker 2 2:09

Because a standard homeowner's policy. It's really designed for those everyday personal accidents and liabilities, okay, not for the ins and outs of running a business out of your home.

Speaker 1 2:21

So then, when we talk about being underinsured, yeah. What does that actually mean?

Speaker 2 2:26

That's a great question. Yeah, because you know we throw that term around a lot, right Underinsured. But what does it actually mean for for the person listening at home, right? What it really boils down to is you know, if something were to happen and you were found liable, you could be personally on the hook for things like medical bills, legal fees, even having to replace someone's damaged property which can be expensive.

Speaker 1 2:51

It can be.

Speaker 2 2:52

And no one wants to think about that.

Speaker 1 2:53

No.

Speaker 2 2:54

But it's important to be aware of those risks.

Speaker 1 2:57

Right.

Speaker 2 2:59

And those costs can be significant.

Speaker 1 3:00

Yeah.

Speaker 2 3:01

And we're not just talking about a couple hundred bucks here.

Speaker 1 3:04

Right.

Speaker 2 3:04

This could potentially put your personal assets at risk. Right, and we're not just talking about a couple hundred bucks here. This could potentially put your personal assets at risk, and that's a whole other ballgame, yeah.

Speaker 1 3:09

No one wants that.

Speaker 2 3:10

And that's where business insurance steps in, and it provides that safety net. It gives you that peace of mind, knowing that you're protected.

Speaker 1 3:18

So where do we even start then? Because we're talking about business insurance, right, but I know they're different.

Speaker 2 3:24

Right, they're different flavors.

Speaker 1 3:25

Flavors, yeah. So how do we even begin to figure out what we need?

Speaker 2 3:30

Well, luckily, ezekiel outlined some good options in his guide, and he talks about three main types of home based business insurance. Ok, you've got your homeowners policy endorsements.

Speaker 1 3:43

OK.

Speaker 2 3:44

You've got in-home business policies and then you've got business owners policies.

Speaker 1 3:48

OK.

Speaker 2 3:49

And we can break those down a little bit further if you'd like, let's do it.

Speaker 1 3:52

Let's start with the homeowners policy endorsement. Ok, because that sounds like it could be simple.

Speaker 2 3:57

Yeah, it sounds like the simplest Right.

Speaker 1 4:00

Right.

Speaker 2 4:00

It sounds kind of like an add on, and it is. It's kind of like a booster shot for your existing homeowner's policy and it adds a layer of coverage Specifically for those business activities that you're doing out of your home.

Speaker 1 4:13

Got it.

Speaker 2 4:14

So it's a great option if you have a relatively low-risk business. Maybe you're selling I don't know, like handmade crafts online. You're not really having a lot of client interaction.

Speaker 1 4:28

Right.

Speaker 2 4:28

You're not storing a ton of inventory in your home, right? That could be a good option for you. Okay, just to give you that little extra layer of protection without having to get a whole separate policy.

Speaker 1 4:39

Okay, so it's a little more than yarn Right that we're selling.

Speaker 2 4:42

Exactly. We need to step it up a notch. Step it up Exactly.

Speaker 1 4:45

So then, what about the in-home business policy?

Speaker 2 4:47

Yeah, so the in-home business policy. It provides a bit broader coverage than just that simple endorsement.

Speaker 1 4:53

Got it.

Speaker 2 4:54

And it's specifically designed for home-based businesses.

Speaker 1 4:58

Okay.

Speaker 2 5:08

So it's going to cover things like business equipment liability, even and this is a big one income loss.

Speaker 1 5:10

okay, if something happens to your home office and you're not able to work so it provides more of that specific protection that you might need as a home based business owner okay, so that's that's good to know that that's an option, yes, and then we have the and then you've got the big one. The big one. What is that?

Speaker 2 5:27

The business owner's policy.

Speaker 1 5:28

Okay, the BOP, so BOP.

Speaker 2 5:30

Yeah, this is like the all-inclusive package of business insurance.

Speaker 1 5:34

Got it.

Speaker 2 5:34

It bundles general liability, business property insurance, business interruption insurance. It puts it all together in one neat little package. It puts it all together in one neat little package Okay. And that can be really helpful for a lot of business owners, because it just simplifies things.

Speaker 1 5:48

Okay, so like give me an example when would like, when would I really need that Sure?

Speaker 2 5:53

So let's say I don't know a fire right Right. Forces you to temporarily close your business.

Speaker 1 5:59

Right.

Speaker 2 6:00

Business interruption insurance. It would kick in.

Speaker 1 6:02

Okay.

Speaker 2 6:03

And it would help to replace that lost income. Okay, while you're getting back on your feet, that's huge no-transcript.

Speaker 1 6:10

Yeah, it's a really good point.

Speaker 2 6:11

Because a lot of people don't realize that you know if you have to close your business for a week two weeks a month.

Speaker 1 6:19

Right.

Speaker 2 6:19

That's income that you're losing.

Speaker 1 6:21

Right.

Speaker 2 6:21

And that can be devastating.

Speaker 1 6:23

Yeah, and especially.

Speaker 2 6:24

Especially if you're a smaller business.

Speaker 1 6:26

Right, if you're relying on that income Exactly, yeah, yeah, wow, ok, so we have these three different options.

Speaker 2 6:32

Three main options.

Speaker 1 6:33

How do I like as a listener? How do I know which one is right for me?

Speaker 2 6:38

Well, it really all comes down to your specific situation.

Speaker 1 6:42

Okay.

Speaker 2 6:43

And Ezekiel. He actually has a really great comparison table in his guide. Okay, that, I think, would be really helpful for anyone listening who's trying to figure this out.

Speaker 1 6:52

Okay.

Speaker 2 6:53

Because it lays out, you know, the pros and cons of each type of policy, so you can kind of see okay, you know, based on my needs, based on my budget, what makes the most sense for me.

Speaker 1 7:05

Right.

Speaker 2 7:06

And so I always recommend, you know, take a look at that.

Speaker 1 7:08

Really compare? Yeah, and don't be afraid to-. No, guess Kind of like write down, like OK. What does this mean for me?

Speaker 2 7:15

Yeah, what are the risks?

Speaker 1 7:17

Yeah.

Speaker 2 7:18

What are my specific risks?

Speaker 1 7:19

Yeah, so even if we do pick one of these options, are there ever situations where we might need a little bit more.

Speaker 2 7:26

Yeah, absolutely, and Ezekiel actually goes through some additional coverages that you might want to consider.

Speaker 1 7:32

OK.

Speaker 2 7:32

So let's say, for instance, you give, you provide professional advice as part of your business. Okay, right, so you're, you're, maybe you're a consultant, okay, you're a coach, something like that.

Speaker 1 7:44

Got it and a client claims that your advice actually harmed them in some way or it caused them some sort of financial loss, right? What happens, then yeah, because that feels like that could be. That could be a actually harmed them in some way, or it caused them some sort of financial loss.

Speaker 2 7:56

What happens then? Yeah, Because that feels like that could be-.

Speaker 1 7:59

That could be a big problem. A big problem, right. And that's where professional liability insurance comes in, sometimes called errors and omissions insurance, got it? It's there to protect you from those types of claims.

Speaker 2 8:10

Okay, so-. So, even if it's not true, Even if it's not true, because you could be sued.

Speaker 1 8:15

Right, just for.

Speaker 2 8:17

And those legal defense costs alone.

Speaker 1 8:19

Oh right Can be astronomical. Yeah, that's a good point.

Speaker 2 8:22

So professional liability insurance is, is there to kind of be that safety net for your, for your expertise, for the advice that you're giving. Ok, so that you can, you know, have that peace of mind that you're protected.

Speaker 1 8:36

So it's kind of like. It's almost like peace of mind insurance in a way.

Speaker 2 8:40

It really is. It is yeah.

Speaker 1 8:41

Because you're right.

Speaker 2 8:43

Even if, even if you've done nothing wrong, right, you could still be sued. Yes, and that in and of itself.

Speaker 1 8:49

That's going to cost you.

Speaker 2 8:50

It's going to cost you a lot Okay.

Speaker 1 8:52

So what about if I have people working for me?

Speaker 2 8:55

Yes.

Speaker 1 8:55

What do I need to know there?

Speaker 2 8:57

So if you have employees working from your home, even if it's just someone coming in once a week to help you with something, you're going to need to think about workers' compensation insurance.

Speaker 1 9:13

Okay, and just to back up for a second, because we just threw out a lot of terms there.

Speaker 2 9:17

We did.

Speaker 1 9:17

What is workers' comp?

Speaker 2 9:19

So workers' compensation insurance. It basically covers medical expenses and lost wages for an employee who gets injured while they're working for you. So if they trip over that laptop cord while they're coming to do some work for you, workers' compensation insurance would kick in.

Speaker 1 9:40

Okay, got it.

Speaker 2 9:41

It protects them, but it also protects you, as a business owner because you're not personally liable for those costs. Okay, so it's a really important one. That's a good point To consider if you have anyone working for you.

Speaker 1 9:52

Yeah, Okay, okay, even if it's just a one-time thing. Right, what about? Okay, so I'm thinking about my situation, right.

Speaker 2 10:00

Okay.

Speaker 1 10:01

And I do use my personal vehicle.

Speaker 2 10:03

Okay.

Speaker 1 10:03

To like maybe go meet a client.

Speaker 2 10:05

Okay.

Speaker 1 10:06

Or to go, I don't know, maybe go to the post office or something. Right, am I covered?

Speaker 2 10:09

That's a great question.

Speaker 1 10:10

Yeah.

Speaker 2 10:11

And a lot of people don't realize that their personal auto policy might not provide enough coverage if you're using your vehicle regularly for business purposes.

Speaker 1 10:21

Okay, so there's a difference between occasionally and regularly.

Speaker 2 10:24

Exactly, there's a fine line there and it varies by insurer, but in general, if you're using your car for business more than just occasional errands, you're probably going to want to look into commercial auto insurance.

Speaker 1 10:41

Okay, and what does that do?

Speaker 2 10:43

So commercial auto insurance. It's specifically designed for business use of your vehicle, so it's going to provide higher coverage limits, which is important, and it's going to cover a broader range of situations. Okay, so it's more, it's more, it's, it's more comprehensive. Comprehensive, got it Okay and it gives you that peace of mind that you're you're fully protected.

Speaker 1 11:05

Okay, so it seems like a lot of this boils down to just really being honest about.

Speaker 2 11:10

Yes.

Speaker 1 11:11

What we're using things for and how often we're using them.

Speaker 2 11:14

Absolutely Honesty is the best policy.

Speaker 1 11:17

Right.

Speaker 2 11:17

When it comes to insurance.

Speaker 1 11:19

Right.

Speaker 2 11:19

Because the last thing you want is to have a claim denied because you weren't upfront about how you're using. You know whether it's your vehicle or your home.

Speaker 1 11:29

Your home or if you have employees coming in.

Speaker 2 11:32

Exactly.

Speaker 1 11:33

And not even realizing that that's something I needed to tell them.

Speaker 2 11:36

Exactly, yeah, yeah.

Speaker 1 11:37

Okay, good to know. So we kind of know what we might need, right? How do we go about actually getting it?

Speaker 2 11:45

Right, so we kind of know what we need how do we get it?

Speaker 1 11:47

What's like the process?

Speaker 2 11:49

Because that's a whole. That's a whole other thing.

Speaker 1 11:51

Yeah.

Speaker 2 11:52

Right, it can feel daunting.

Speaker 1 11:54

It feels very daunting.

Speaker 2 11:55

And to even like think about where do I even start?

Speaker 1 11:58

Yeah, how do I even start to compare this stuff?

Speaker 2 12:00

yeah, and and the good news is, it's a lot easier than it used to be. You know, we have the internet now right which is helpful. Yeah, a lot of insurance companies have right online tools where you can get quotes okay pretty quickly right um, you know, you can also still do things the old-fashioned way call up an agent, have them walk you through it.

Speaker 1 12:20

Okay, so there are options.

Speaker 2 12:21

There are options. Ezekiel's agency will even do quotes by text now.

Speaker 1 12:26

Oh, wow, okay, that's pretty cool.

Speaker 2 12:29

Which is kind of cool.

Speaker 1 12:30

Yeah, but no matter how we're doing it Right. What are, like, the things we need to watch out for as?

Speaker 2 12:34

we're going through these quotes so it's just like you know yeah shopping for anything else online, right? Okay, you don't want to just go with the first pair of shoes you see, right? The cheapest you want to. You want to compare? Compare, yeah, okay shop around got it. You want to get multiple quotes?

Speaker 1 12:49

okay, from different insurers okay, so we're not just looking at the price exactly.

Speaker 2 12:55

Don't just focus on the price right because in ezekiel he talks about this in his guide. You know, you might see a quote. That's like super cheap and you're like, oh, this is great.

Speaker 1 13:04

Yeah.

Speaker 2 13:04

But then you look at the details and the deductible is like astronomical.

Speaker 1 13:09

Right, right or it doesn't cover.

Speaker 2 13:11

Or it has all these exclusions.

Speaker 1 13:12

The thing that I actually need it for.

Speaker 2 13:14

Exactly Right.

Speaker 1 13:21

So it's really important to to compare, to compare those details.

Speaker 2 13:22

Yeah, beyond just that number. Yeah, that bottom line number got it because you know you, you might save some money up front okay but then if you ever have to actually use the insurance right it's gonna cost you yeah way more in the long run right.

Speaker 1 13:36

So it's kind of like that balance between affordability and also being covered.

Speaker 2 13:40

And coverage. Yeah, finding that sweet spot.

Speaker 1 13:43

Sweet spot.

Speaker 2 13:44

And don't be afraid to ask questions.

Speaker 1 13:46

Right.

Speaker 2 13:47

You know when you're talking to an insurance agent or if you're on a website and you're looking at a quote and you see something deductible. You're like what is? That. What is that?

Speaker 1 13:56

Right.

Speaker 2 13:57

Don't just gloss over it. Yeah, click on that little question mark. Yeah, find out what it means.

Speaker 1 14:02

Right, because that's their job Right.

Speaker 2 14:04

Exactly they're supposed to explain this stuff to you.

Speaker 1 14:06

Yeah.

Speaker 2 14:07

Make it clear.

Speaker 1 14:08

Got it.

Speaker 2 14:08

Because, at the end of the day, right, it's about protecting. Yeah, you and your business Right, because we covered so much.

Speaker 1 14:17

We did About homeowners. So much information.

Maximizing Home-Based Business Insurance Protection

Speaker 2 14:19

Yeah, about business insurance. Yeah, it seems like the main takeaway really is be honest about what you're doing.

Speaker 1 14:27

Be honest. Ask questions. Ask questions right, Don't be afraid to shop around.

Speaker 2 14:32

Shop around, don't just go with the first thing you see.

Speaker 1 14:35

Exactly, yeah, and if you can, you know if it makes sense for you Right, talk to a professional.

Speaker 2 14:41

Yeah, they can really, they can really help guide us.

Speaker 1 14:44

Guide you through this process.

Speaker 2 14:46

Yeah, because it can be confusing. It can.

Speaker 1 14:49

But it doesn't have to be.

Speaker 2 14:51

Right, and you're right. At the end of the day, it's about protecting ourselves, exactly. So, that we can then focus on Right, Because the last thing you want to be thinking about is oh, am I, am I covered? Right?

Speaker 1 15:02

Exactly If this happened.

Speaker 2 15:03

Right, we want to think about our business, you want to be focused on growing your business and serving your customer.

Speaker 1 15:09

That's what we're here for. Yeah, okay, this was awesome. Thank you so much for breaking all that down.

Speaker 2 15:14

Happy to be here. It was fun.

Speaker 1 15:16

Yeah, you know, this is one of those things that you don't always think about, but when you need it it's important, you need it, it is so everybody listening, make sure you're taking care of this so that you can focus on the fun stuff exactly all right, thanks again.