Skip Ribbon Commands
Skip to main content

New National Survey Finds Nearly 60 Percent of Home-Based Business Owners Without Insurance


Study Finds 11 million home-based businesses in the U.S.


ALEXANDRIA, Va., February 25 - Most of America's 11 million home-based businesses are vulnerable to significant financial losses because they do not have the proper business insurance coverage, a new survey commissioned by the Independent Insurance Agents & Brokers of America (IIABA) has found.


The survey, conducted by International Communications Research, reveals that one in 10 U.S. households operates some type of full or part-time home-based business. However, nearly 60 percent of these businesses do not have insurance coverage. When asked about the lack of insurance, nearly 40 percent of home-based business owners say they thought they were protected by some other type of coverage, while almost 30 percent say their businesses are too small to insure. Notably, nearly 20 percent could not give a reason for not having insurance.


A similar survey in 1997 found that there were 8.4 million home-based businesses in the United States and that 60 percent were not properly insured.


“In 1997 we found that a majority of home-based businesses were not properly insured. The fact that this has not changed confirms a lack of knowledge about the importance of business insurance coverage,” says Madelyn Flannagan, IIABA vice president of education and research. “Proper insurance coverage can protect business owners from losses that can devastate a home-based business.”


By not having business insurance, says Flannagan, home-based business owners are at risk for significant financial losses associated with theft, accidental damage, natural disasters, vehicle accidents and liability if an employee suffers an injury while on the job or a business guest is hurt while visiting the home-based business. Homeowners’ insurance normally does not provide protection in these situations.


The survey also reveals that home-based business owners with low incomes are less likely to have business insurance coverage. However, an alarming 41 percent of business owners in households making more than $75,000 per year also lacked adequate business coverage. Additionally, home-based businesses that do not have insurance are slightly more likely (11 percent) to have experienced a financial loss than are those that do have insurance (9 percent).


“Income and business size should not be a deterrent when it comes to protecting a home-based business,” says Flannagan. “Protection now can provide security and peace of mind as a business grows and produces more income.”


According to Flannagan, while levels of coverage and premiums depend on the risk associated with each business, a comprehensive commercial policy can cost a home-based business as little as $250 a year.


To protect home-based businesses, IIABA offers the following tips:


·         Check your homeowners’ policy: Homeowners’ insurance was never meant to cover business exposures. Coverage for certain business items is limited and homeowners’ coverage provides no liability insurance for home-based businesses. Additionally, a homeowner’s policy affords no business interruption coverage in the event that a loss causes a home-based business to cease operations. However, a home-based business owner may be able to obtain an endorsement to add these coverages to an existing homeowners’ policy.  See an independent insurance agent to secure coverage for your home-based business.


·         Check business insurance policy options: There are several options for home-based businesses including incidental business endorsement, a business owner’s package policy, or an in-home business owner’s policy. An independent insurance agent can provide guidance on the most appropriate type of coverage.


·         Protect Yourself: If a home-based business is a full-time occupation, business owners must consider protections such as life insurance, health insurance, disability protection and workers’ compensation. An independent insurance agent can help identify risks areas and find the appropriate coverage to protect you, your family and your home-based business.


For additional information on protecting all aspects of home-based businesses, please visit or



Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address:




FOOTNOTE: To receive a summary of the survey results, a contact list of home-based business owners and a listing of home-based business associations and resources, please contact Jemarion Jones at (703) 706-5445 or


FOOTNOTE: The survey was conducted by Media, Pa.-based International Communications Research from February 6-10, 2004. More than 1,000 interviews were weighted to provide national estimates of 110,800,000 U.S.households. The average margin of error is +/- 3.1 percent. For more information on ICR, please visit





​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

Follow Us!

Empowering Trusted Choice®
Independent Insurance Agents.​