Insurance?

[cjtinkle]

I must be asking the wrong questions. I keep calling various local insurance agencies to get either a rider added to a home policy or a separate business policy, and no one will write it.

They all say they can't insure a business inside the home. I tell them I need equipment coverage, quilt coverage, and liability coverage in case of injury.

I'm stumped?

[Bonnie]

Keep asking questions....I would go back to your home owners Insurance agent and keep playing 20 questions...maybe they just don't understand what you are saying. And not knowing Arkansas's insurance rulings you may very well not be able to get an insurance rider for a home business, or your area isn't really zoned for a home business.

When I was in Nevada, I had my studio 3-4 miles away from the house because I wasn't zoned for a home business...and I had my stuido for 7 years before I secretly moved it to the house, because I was in the process of moving to New York...and didn't want to have a lease I couldn't get out of should I need to leave earlier than the 12 month period. Luckily I didn't have any customer's needing to come to the house, I always met them in town someplace or the LQS, so my neighbors didn't even know I had moved it...and lucky me I didn't have anything go wrong like a fire or a robbery.

[cjtinkle]

I'm in Arkansas... there's no zoning. LOL I'm out of city limits, no restrictions at all.

I could probably work around customers coming here I suppose, perhaps if that weren't an issues I might be able to secure insurance at least for their quilts and my equipment.

[Darlene Epp]

Hi CJ,

You should be able to get your very expensive "sewing machine" covered under your homeowner's insurance. The customer should have their own insurance on their quilts, even if they're at your house.

If you only keep one weeks worth of quilts in your house, there's not so much to worry about. I had my customers drop off their quilt tops Monday morning (or whenever) and they picked them up a week later. During the "waiting period", the customer had the quilt top in their own possession.

[Primitive1]

CJ,

I had the same issue as I had some older customers comming into my home to drop off and pick up quilts, so I wanted liability, and equipment coverage. I called USAA, which we have insurance with and they said they would only cover up to $2,500.00 for the machine which we all know would not be enough but they work with The Hartford which does small business coverage. So long story short, I was able to get the liability coverage as well as equipment replacement, and quilt tops, coverage for my business that I run out of my home. Try giving USAA a call and ask about it, hopefully they will be able to help you.

[cjtinkle]

Thank you, I will give USAA a call!

Darlene, I'm going to try for coverage under my homeowners policy if I can't get business insurance, but I have close to $50k in machines in my home, I don't think they're going to buy it, LOL. We always run into problems because the contents of our house and shop far exceed the value of the house and shop!

[Lynne in Iowa]

My machine is insured under what my agent called an "inland marine" policy. Why I don't know. I don't have a business yet, so it is just the Lenni being insured. He came and took pictures of it to attach to the policy. (He also took a pic of my fabric stash because no adjuster would ever believe how much it is worth!)

[cjtinkle]

I just got off the phone with USAA, they will cover me for $557 per year, million dollar liability, $5k deductible.

Does that sound reasonable? I think it's a little high.

[jendoud]

That is a little high. I'm an insurance agent by day, quilter by night. You should be able to purchase a businessowners policy (BOP) for around $350 a year. Be sure to ask the agent if property of others in your care, custody and control is included under the definition of business personal property. That way your equipment is covered, but customer quilts are also covered while on your premises. Your homeowners will not cover a machine used for business purposes. You also need the general liability coverage for something as simple as a "slip and fall" on your premises while a customer is picking up a quilt. Let me know if you need any more insurance info.

[cjtinkle]

Thank you Jen, the policy covers liability (if someone slips and falls while here) for up to a million dollars, and quilts (average value of $200 each) for materials only (not appraised value), plus my equipment. Of course with $5k deductible, I'd be paying for most everything out of pocket!

[ThreadWaggle]

It is interesting that USAA could cover both of you, because they can't cover my in home business in NC. They had me go through Hartford becuase they have an partnership with them. It must have something to do with NC's insurance laws.

[Katydids]

Originally posted by Lynne in Iowa

My machine is insured under what my agent called an "inland marine" policy. Why I don't know. I don't have a business yet, so it is just the Lenni being insured. He came and took pictures of it to attach to the policy. (He also took a pic of my fabric stash because no adjuster would ever believe how much it is worth!)

I also have an "inland marine" policy. I got that because it covers my machines when I take them on the road for shows. It covers while in transit, at the shows or for any theft, as well as while in my home studio. Liability is included.

I don't understand why you would have that kind of policy if your machine stays put. I checked with several local companies and I found what I thought was the least expensive for what I have. I pay $1100.00 per year and now seeing what jendoud is saying, I must be getting ripped off! Maybe it is a FL thing too, as insurance is quite high here with all the hurricanes. I need to look into USAA, although I just renewed.

[Lynne in Iowa]

I'm thinking we chose that coverage because the machine is not in my house, but in a room built for it in hubby's tractor shop. His "toys" and tools in there are covered under the same policy.

A severe tornado in our area educated everyone on what insurance companies to use and what kind of coverage to have the hard way. That's partially why he took the pic of the fabric stash too. (I think the other reason was to show the others in the office how nuts he thinks I am!) (He's a friend - I can say that)

[njquiltergirl]

Hi.

I have that policy by USAA/their affilliate. That is about what I pay. For me, I feel much more relaxed about the little-old-lady-with-a-walker coming to my front steps....aided by her little-old-hubby-using-a-cane-to help her. True story. That day, I got insurance!

It covers customers while in my home and a part of my equipment.

The peace of mind is worth it. Many can not get health insurance, so if the fall...they sue to get the bills paid.

Just say you have a home-based business and want liablilty coverage for when customers come into your home. They get that!

Lisa

APQS Liberty

CL

NW NJ

[LinneaMarie]

I was quoted $700/year through Nationwide. We have had our 2 houses and cars with them for eons. I thought it was high; and I'm shopping!

[cjtinkle]

I didn't think an inland marine policy covered liability, just theft or damage?

[Katydids]

Mine does. one mil liability.

[ThreadWaggle]

Patty,

I am paying close to what you are, so you are not alone. I got mine after I became a dealer, so I wonder if that has anything to do with the cost difference. I know that they wanted square footage for studio and what I paid for each machine. I image that it will go up in a couple weeks when I move into the new house since my studio will be larger.

[cjtinkle]

I spoke with USAA again, asked about the liability on an inline marine policy, they said no, but I could purchase one PLUS a liability policy, but that came to $700 something per year. Also, on the $557 I mentioned earlier, it has a $500 deductible, not $5000!

[Primitive1]

CJ,

The 550 is close to what I am paying for all of that liability coverage and equipment and quilt top coverage, I just figure it as a business expense and like Lisa says, you don't have to worry...it was the only company I could find that would give me the coverage I wanted. Others could not seem to understand what I was doing and kept wanting to call me a manufacturing company, so I am happy with it. Besides, I think the customer service that you get with USAA and their affiliates can't be beat, so it is worth it!

[TAQuilts]

For IRS purposes I was advised to list my "business structure" as being Manufacturing when I applied for my Fed Tax ID #. Although I could have chosen Service or Retail etc., the IRS really isn't too picky what you list as a business structure. but the IRS actually does have a business structure number, under the Classification of "Manufacturing" for Pieced Dry Goods/Sewing. Not that you must use it, it's up to you. Although this is why banks and Ins. companies often refer to quilters as a Manufacturing Business, Cuz the IRS actually has a code for our trade if you choose to use it.

The IRS # under Manufacturing for making Hobby Dry Goods is 42192, the # for Pieced/Sewing Dry Goods is 42231.

Terry

[Sandra Darlington]

Hi,

I have been reading this thread with interest. I am in the process of setting up a business...finally!

I am going for the Sole Proprietorship, at least to begin with. I have talked to my accountant and the paperwork is ready to be filed, however, I am waiting for the insurance to get straightened out. There is no point in me starting a business without propper coverage.

I have Nationwide for my cars and the house. After going back and forth for 2 weeks, they have finally said they can't insure me for ANY liability, but the agent doesn't see why I would need it anyway!. I won't have people coming to my house, but I want to have coverage on their quilts if I ruin them in some way, or in the customer's eyes they are ruined.

Is there anyone who can offer suggestions on what I should do? What coverage do other Sole Proprietors have? What insurance company do you use?

I am so frustrated that I have just about decided not to start a business at all! Any suggestions will be welcome.

Thanks,

Sandy

[cjtinkle]

I ended up with USAA... my annual premium ended up at $500 annually, with a $500 deductible. it covers a whole range of options I don't really need, but in the end, it's all I could find.

[Sandra Darlington]

Thanks CJ.

I called Nationwide's national account team and the girl said she will have a different local rep call me later today. She couldn't say for sure, but feels that Nationwide can cover me. But, I guess I need to talk to this other Nationwide agency and find out what he says.

I would be fine paying $500 a year for the peace of mind.

What does USAA stand for? I'm not familiar with them.

Also, are you a Sole Proprietor or LLC, or something else? Just curious.

[ThreadWaggle]

USAA is the United Services Automobile Association. As far as insurance, you have to be active military or retired/veteran or the spouse of child of a member. There are different rules for banking and investing.