By Greg Barcomb

Some call it a side hustle, or a start-up, or a side project….but at some point we are talking about a business.  From Facebook in a dorm at Harvard, or Apple in a garage in California, some of the largest companies in the world started out with an idea and a dream.  But for every Apple or Facebook, there are hundreds of others that don’t quite make it out of the garage.  A study by the Small Business Administration showed that 50% of businesses fail during their first year.  Many fail due to things out of their control.  You can’t control the marketplace, trends, or the weather, but what you can control if you chose to, is risk.  As a mentor once told me “work only to control the controllable”.  

Starting a business is risky; there is no question about it.  But if you believe in your product and yourself as a business owner, the risk is well worth it.  The entrepreneurial spirit is what built this country and continues to make it great!  So take the leap!  Just do the due diligence to know how what kind of leap you are taking and what’s at risk.  

The best place to start is to take a look at the insurance policies you may already have in place.  If you are operating out of your home or apartment it is crucial to know how your homeowners, renters or auto insurance policy would respond to situations involving your new business.  In most cases these policies will offer little or no protections for your business pursuits.

One simple question you need to evaluate whether you are running the entire business from a laptop and cell phone or have other equipment specific for your business.   If that equipment or business personal property were destroyed or stolen most homeowner policies would limit coverage or exclude coverage altogether.  

What about visiting clients?  Most homeowner policies exclude third party liability claims resulting from at home business operations.  So let’s say we practice the risk management technique of avoidance, and just don’t have clients to our house.  We go meet them.  Do you know how your auto policy would respond if you were in an accident while going to visit a client?  The insurance carriers view these kinds of accidents different than if you are in an accident going to the grocery store.  Again we might have a gap in coverage you thought you had insured.  

The homeowner, renters, and personal auto policies exist as safety nets to protect you as an individual, not you as a business.  In fact some policies even consider operating a business out of the home a violation of policy terms and could void all coverage.   So what do you do? What insurance do you buy?  It’s different for everyone and every kind of business so you need to talk to someone about what the options are.

As Murphy’s Law tells us- what can happen, will happen; and as a new business the difference between a lifetime of success and not making it through the first couple years could be some simple early conversations about managing risk.

Contact Ten Eyck Group today at (518) 464-0059 for all of your Albany insurance needs!
Posted 5:50 PM

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