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Older businesses at highest risk for business losses
This information was provided by the Independent Insurance Agents of America
ALEXANDRIA, Va.--Nearly 70 percent of in-home business owners between the ages of 55 and 64 are at high risk for devastating business losses because they lack adequate insurance, ranking this age group as the most vulnerable according to a new study released this week by the Independent Insurance Agents of America (IIAA).
"This statistic is most disturbing because many of these entrepreneurs are retired or close to retirement and are supplementing their often limited incomes by running small businesses from their homes," said Madelyn Flannagan, a Consumer Affairs Advocate at IIAA. "Many would not be able to absorb large property or liability losses without depleting their retirement savings."
Many in-home entrepreneurs do not even realize they don't have the necessary coverage to protect their business from theft, physical damage, and other expensive losses. Nearly 43 percent of home-based entrepreneurs between the ages of 55 and 64 have neglected to purchase business insurance because they mistakenly thought they were covered by another type of policy.
Additionally, those in the 55-64 age group who are insured are still less protected than any other age group. These in-home business owners are nearly twice as likely as any other age group to purchase less comprehensive and often inadequate "supplemental business riders" to their standard homeowners policies than a business insurance package that will provide coverage for theft and property damage as well as expensive liability claims and loss-of-income.
The U.S. Bureau of Labor Statistics estimates that there are more than 18.3 million home-based businesses in the United States. And, there are as many as 43 million Americans running these entrepreneurial entities which range from business services to daycare to plumbing. With increasing independence due to technology and growing income and tax benefits, The Home-Based Business Report, estimates that three in 10 Americans will operate a home-based business by 2000.
"While starting a full-time or part-time home-based business may be an attractive option for the over 50 employee discouraged by lack of viable job opportunities or the retiree seeking to supplement retirement income or pursue that hobby that was put on the back burner years ago, it is serious business. There are major financial risks involved," cautioned Flannagan.
IIAA recommends that home-based entrepreneurs seek information on protecting their business assets from an experienced, professional independent insurance agent who will help them protect against liability, loss of income and property damage. While levels of coverage and premiums depend on the risk associated a particular business, a comprehensive commercial policy can cost as little as $150 a year. Less comprehensive policies can cost even less.
Founded in 1896, IIAA is the nation's oldest and largest national association of independent insurance agents, representing a network of 280,000 agents and agency employees. Independent agents offer customers a choice of policies from a variety of insurance companies. Independent agents offer all lines of insurance--property, casualty, life and health.
This information reprinted with the permission of the Independent Insurance Agents of America. For more information about the organization, you can visit their web site.