Photo by Samson Katt

From time to time there are newsworthy articles that involve the insurance world directly discussing how an insurance carrier reacts to a claim. It is important for us to advise you, our valued clients, about these situations. Recent events have highlighted the importance of properly disclosing your home-based business to your insurance company. In a notable case covered by the Calgary Global News last week, a house fire claim was denied due to the home owners failing to disclose their home-based business activities. This incident serves as a vital reminder to those operating home-based businesses about the significance of accurate and transparent communication with your insurance broker.

The Case: In a disheartening turn of events, a family in Calgary recently experienced a devastating house fire. Unfortunately, their insurance claim was initially denied by their insurance company on the grounds of non-disclosure. The insurer argued that the insureds failed to inform them about their home-based business operations.

The Lesson: While the insured parties had taken out a separate policy for their home-based business, the insurer handling their homeowner’s insurance claimed they were not aware of the business activities. Consequently, they denied coverage for the damages resulting from the fire.

Full Disclosure: The incident underscores the importance of full disclosure to your insurance carrier by way of having a discussion with your insurance broker. When you operate a home-based business, it is crucial to inform your insurer about the nature of your business activities. Be transparent about the scope of your operations, whether it’s product sales, services offered, or clients visiting your premises.

Separate Business Insurance: Even if you have a separate policy for your home-based business, it is important to inform your homeowner’s insurance company. While the business policy might cover specific aspects of your operations, it’s essential to disclose the existence of the business to your homeowner’s insurer to avoid any coverage gaps.

Policy Review: After learning about this unfortunate incident, take the opportunity to review your existing insurance policies. Ensure you have appropriate coverage for your home-based business. Consult with your insurance broker to evaluate your current policies and make any necessary adjustments to ensure comprehensive protection.

Communication with Your Insurance Broker: Maintain open lines of communication with your insurance broker or agent. Inform them about any changes or updates to your home including business operations. They can guide you in understanding how these changes may impact your insurance coverage and recommend necessary adjustments.

The unfortunate events in Calgary case serve as a valuable reminder that home-based business owners must be proactive in disclosing their business activities to their insurance providers. Failure to do so can lead to claim denials and significant financial losses. By practicing full disclosure, reviewing your policies, and maintaining communication with your insurance broker, you can protect your home-based business adequately.

Remember, as your trusted insurance broker, we are here to help you navigate the complexities of insurance coverage. Reach out to us today to discuss your home-based business insurance needs and ensure you have the right protection in place.