Insurance For A Home Business Without License

Business By haymeli Updated 26 Jan 2011 , 2:15pm by haymeli

haymeli Posted 25 Jan 2011 , 4:43pm
post #1 of 16

I run my business from home and lately my husband has been nagging me about insuranceicon_confused.gif . My business is not licensed. Does anyone know if I can get business insurance anyways?

Thank you?

15 replies
leah_s Posted 25 Jan 2011 , 4:52pm
post #2 of 16

Does your city/state require a license to legally sell baked goods from home? Where are you located?

MadMillie Posted 25 Jan 2011 , 4:54pm
post #3 of 16

Maybe you can just take out an umbrella policy with your home owners insurance. We have a swimming pool and that was a way we could get extra protection, $1,000,000 coverage.

pattycakesnj Posted 25 Jan 2011 , 4:58pm
post #4 of 16

If you are operating illegally, any insurance you may be able to obtain would be null and void if there was a claim. The first question an adjuster would ask is if you are operating a legal business. If not, they would probably not pay a claim and yank coverage. Insurance does not protect you if you are operating illegally. That said, does your state allow a business without a license from home? You need to check, license and insurance depend on different things. You may not have to have a license to get insurance but you can't be operating illegally to get insurance.

haymeli Posted 25 Jan 2011 , 5:19pm
post #5 of 16

I am in FLorida. I just spoke to an agent and she said that it was no problem. I can get the policy on my name and when I become legal switch the policy to my business name. I am still confuse. I do not want to pay for something that will be nulled and be of no use.

jason_kraft Posted 25 Jan 2011 , 5:21pm
post #6 of 16

I'm sure an insurance company would gladly sell you an insurance policy even if you are operating without a license in a state that requires licensed kitchens...it's a great money-maker for the insurance company since any claim relating to the business will probably be denied.

jason_kraft Posted 25 Jan 2011 , 5:22pm
post #7 of 16
Quote:
Originally Posted by MadMillie

Maybe you can just take out an umbrella policy with your home owners insurance. We have a swimming pool and that was a way we could get extra protection, $1,000,000 coverage.



Umbrella policies on personal homeowners insurance policies usually specifically exclude commercial activity in the home (licensed or not).

pattycakesnj Posted 25 Jan 2011 , 8:37pm
post #8 of 16

agree with jasonkraft, they will sell it to you no questions asked, but if there is a claim, you probably won't get anything from the insurance company if operating illegally

cownsj Posted 25 Jan 2011 , 9:02pm
post #9 of 16

On top of all of that, it could also show to the state your knowledge that you know you are operating an illegal business and they may not give you the opportunity to just close up shop until you become legal. You could get a stiff penalty right off the bat.

costumeczar Posted 25 Jan 2011 , 10:50pm
post #10 of 16

Agreed...If you're illegal then don't bother because the insurance won't cover any claims. Keep in mind that if you're driving to deliver cakes and you get in an accident, your car insurance is also going to be involved if it's not registered as a business-use policy also. They can deny any claims if they find out that you were using the car to deliver a cake for an illegal business.

indydebi Posted 26 Jan 2011 , 1:35am
post #11 of 16
Quote:
Originally Posted by jasonkraft

I'm sure an insurance company would gladly sell you an insurance policy even if you are operating without a license in a state that requires licensed kitchens...it's a great money-maker for the insurance company since any claim relating to the business will probably be denied.




As a former licensed insurance agent, if i sold coverage to a person KNOWING they'd never be able to make a claim on it, the person could sue ME for the insurance equivalent of mal-practice, which is why agents carry what is called "Errors and Omissions" insurance coverage. I possibly could even be charged /convicted of fraud by selling a policy with the "never make a claim 'coz it won't stand up" knowledge.

I find it very 'unfair' to assume that insurance agents are grinning real big and wringing their hands in anticipation of selling a policy that won't do the policy holder any good just so the agent can rake in the commission. there really ARE laws against such actions.

To the OP .... just be sure to ask the agent the right questions. Are there any exclusions for business transactions on an umbrella or on a homeowners or a personal liability policy?

jason_kraft Posted 26 Jan 2011 , 2:06am
post #12 of 16

To be fair, just about all of my business with insurance companies to date has been fair and above-board, but as with all industries there are unscrupulous parties who will try to take advantage of customers (or just sell someone an unusable product or service because of a knowledge gap). My intention was not to generalize about the entire industry, and I probably could have worded that better. icon_smile.gif

scp1127 Posted 26 Jan 2011 , 5:02am
post #13 of 16

But.. a new agent may say you can be covered and not collect the right info and believe you are a legit business. Still, claim denied, no refund. Also, courts do not acknowledge illegal businesses and will not hear a case. So you could not go to small claims for non-payment by a client. But the client can come after you in court.

indydebi Posted 26 Jan 2011 , 5:06am
post #14 of 16
Quote:
Originally Posted by scp1127

But.. a new agent may say you can be covered and not collect the right info and believe you are a legit business.



Ergo, that's why they carry "Errors and Omissions" insurance. icon_smile.gif because they "errored" by not getting all of the info needed (i.e. perhaps an EIN, or copy of the biz license, whatever form it may be in, etc).

scp1127 Posted 26 Jan 2011 , 5:18am
post #15 of 16

debi, I know, I used to have a real estate license. I was just supporting the idea that the agents are not crooked. I did have one who would never change the names on my comp policy and I always worried it would be a problem. Luckily, no claims, so I will never know.

haymeli Posted 26 Jan 2011 , 2:15pm
post #16 of 16

Thank you everyone for your advise, I really apreciate it.

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