Insurance opportunity for home-based businesses
Research from Axis Insurance, the specialty insurance business segment of Axis Capital Holdings Limited based in Bermuda, showed significant market opportunities for the US industry at a retail level.
The study focused on home-based businesses, a growing proportion of the American economy and labour force.
Axis Insurance commissioned a poll of 1,000 business owners across the US, revealing a diverse sector spanning almost every industry and consisting of individuals who are overwhelmingly positive about the outlook for their businesses.
Highlights from the survey included their positive state of mind with 73 per cent either “very happy” or “content” with running their home-based business.
Since the start of the pandemic more than half (53 per cent) have seen growth in their businesses and 93 per cent see growth or getting new clients as the areas in which they are best excelling.
But crystallising those growth ambitions is also where home-based business owners want the most help: driving sales or new business (31 per cent) and advertising (28 per cent) are identified as their top priorities.
There are more than 15 million home-based businesses in the US, diverse in nature and spanning almost every industry.
The largest sectors among respondents are e-commerce and home crafts (24 per cent) and professional services including consulting (16 per cent).
The report says these are not brick-and-mortar operations and require different coverage than more traditional commercial insurance.
But the survey found that insurance take-up is uneven among home-based business owners. Particularly among owners whose businesses started out as a hobby or side hustle, the need for specific insurance might not be immediately clear.
While 91 per cent of owners recognise they need insurance, 44 per cent either don’t have any coverage, or are unsure or explicitly do not know what they are covered for by their insurance, suggesting that insurance companies and agents have not kept up to speed with what these businesses need.
Jill Bryant, head of small specialty commercial at Axis Insurance, said: "There is certainly more the insurance industry can do to help these entrepreneurs realise their ambitions by educating business owners about the benefits of insurance and the appropriate coverages for their unique needs.
"Running a business from home presents risks that are not necessarily covered in a standard insurance policy designed for small businesses.
“For example, while the home is at the heart of these businesses, 49 per cent of respondents spend up to half of their time working away from the home, so they need insurance that goes with them.
“And, equally, those owners who have built their businesses out of a hobby or a side hustle, may not have considered that business risks — from professional liability to crime risk — are unlikely to be covered under their home insurance policy.”