Survey: Home Businesses Lack Insurance

According to the results released by IIABA, the survey estimates that there are more than 11 million households in the United States that have a full- or part-time home business. A similar IIABA-commissioned survey in 1997 estimated that there were 8.4 million home-based businesses in the U.S. and that 60 percent of those business owners lacked insurance.

When asked why they did not have insurance, 39 percent said they either thought they did not need insurance or thought they had some other type of coverage for the business; 29 percent thought the business was too small or posed no risk; and 19 percent did not have a reason for not having insurance.

The survey indicated that the greater the income level of a business, the more likely the business would procure insurance, but a substantial number still went without. Examining low income businesses, less than $25,000 in annual income, 77 percent of the business owners did not have insurance, the survey found. Among business owners making more than $75,000 annually, 41 percent did not have insurance.

Regarding losses, the survey found that 11 percent of the businesses without insurance experienced a loss, compared to 9 percent with insurance.

The survey also said that one in ten home-based business owners said they experienced a loss, such as theft, fire or injury resulting from or related to the business.

"In 1997 we found that a majority of home-based businesses were not properly insured," noted Madelyn Flannagan, IIABA vice president of education and research in a statement. "The fact that this has not changed confirms a lack of knowledge about the importance of business insurance coverage."

The survey was conducted by International Communications Research, based in Media, Penn., from Feb. 6 to 10 of this year. The company also conducted the 1997 survey. The survey results are based on a national telephone poll of 1,011 U.S. households and has a margin of error of plus or minus 3.1 percent.