You probably think I’m crazy for asking if you’re insured – OF COURSE you’re not operating with out some sort of errors & omissions insurance! (Right…?) But, while E&O is a vital part of an agency’s operational readiness, I’m referring to business liability insurance.
Business liability insurance, often called General Liability Insurance, is designed to protect a business in the event a client visiting the business has an accident on the property (i.e. someone slips and falls in your lobby), as well as incidents involving “property damage, medical expenses, libel, slander, [and] the cost of defending lawsuits” according to the Small Business Administration’s website. Sometimes, an insurance company will provide insurance specifically geared towards home based businesses, as well. It is important to understand the place that liability insurance can play in protecting you and your business. In the home based business sector of the travel industry, it’s rare that clients visit the offices themselves, but business liability insurance can also protect you and your business off-site – one recent example is a travel agent who had a booth at a consumer trade show was asked for proof of business liability insurance before she was allowed to exhibit.
Once again, I refer to the Small Business Administration: 90% of home based businesses are sole proprietorships, the business classification that protects your personal assets the least. I could not find statistics that indicated what type of business setup was common for home based travel agencies, but regardless of what setup you have, general liability insurance is worth serious consideration.
A common belief is that homeowner’s insurance will provide adequate protection for your business assets such as computers and other office equipment as well as loss of business material (for example, if your home caught on fire and your client files were lost). It’s also believed that riders can be obtained that provide protection in case someone is hurt while in your home conducting business. While this may be true for some homeowner insurance policies, it is not true for all. It is important to determine if your current insurance will protect your business assets, provide coverage for losses due to a business interruption (as in, say, a meteor crashes on your house and it takes you a while to dig it out and rebuild the house). Many business liability policies include coverage for expenses incurred when operating out of a temporary location, which can be invaluable especially if that meteor did strike. (Hey, it could happen.)
Here are some tips to consider when looking at insurance coverage for your business:
Homeowner’s Insurance: Don’t assume your current coverage is adequate. Find out exactly what is and is not covered as it pertains to your business and business assets.
Homeowner’s Policy Endorsement: You will want to check with your insurance company and/or your state’s Department of Insurance to see if your home based business qualifies for a homeowner’s policy endorsement that will allow you to increase your standard coverage for business equipment like computers.
Shop Around: Different insurance companies provide different types of coverage with varying coverage minimums and limits. Do your research on the companies allowed to issue policies in your state and what they offer, so you can be sure to choose the one that is the best fit for your business.
Be Prepared: Keep records of all your business documents and receipts for business purchases and store them somewhere off-site, like a safe deposit box, or on a virtual server. Keep inventories of your business property and their values, and update periodically. Take photos of your home office and equipment in case you need to file a claim. Back up your computer files regularly – financial records, client records, trip plans, photos, everything! Store them off-site, again in a safe-deposit box or on a virtual server. (Check out Back-up (and Recovery)” by John Schaefer for more details on this one!)
Steve Cousino, ACC, CTA, LS is a six-year industry veteran and owner of Exclusive Events At Sea and Journeys By Steve with specializations in group cruising, individual ocean & river cruising, and personalized experiences in Europe, especially the British Isles. He can be reached at firstname.lastname@example.org.