US Market: Many Home Businesses Lack The Right Cover

AXIS Insurance, the specialty insurance business segment of AXIS Capital Holdings Limited (“AXIS Capital”) (NYSE: AXS), has published new research that reveals there is more that insurance companies and agents can be doing to help home-based businesses to thrive and protect themselves from risk. Launching a start-up from home has become increasingly attractive to millions of Americans, with home-based businesses forming a growing proportion of the U.S. economy and labor force.

To understand more about the motivations and challenges facing the individuals behind this flourishing sector and the hard work that goes into running a business from home, AXIS Insurance commissioned a poll of 1,000 business owners across the U.S. The first Home-Based Business Survey from AXIS Insurancepublished today, reveals 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 include*:

  • Positive state of mind: Going it alone is working well for many respondents with73% either ‘very happy’ or ‘content’ with running their home-based business. Almost a quarter (23%) felt they are making progress but still have a way to go, while 3% are less happy but remain optimistic for the future.
  • Pandemic response: Since the start of the pandemic almost one quarter (23%) have seen growth in their businesses accelerate, while 30% have seen growth slow and 14% have changed their whole business model, suggesting the impact of Covid-19 on businesses has varied significantly.
  • Growth ambitions: Almost half (48%) see ‘growth’ as the area in which they are excelling most, followed by ‘getting new clients’ (45%). However, crystallizing these ambitions is also where home-based business owners want the most help: driving sales or new business (31%) and advertising (28%) are identified as their top priorities.
  • No “typical” home-based business: With more than 15 million home-based businesses in the U.S., they are diverse in nature and span almost every industry. Among respondents to the survey the largest sectors for home-based businesses are e-commerce & home crafts (24%) and professional services including consulting (16%).
  • Different drivers: What drives home-based business entrepreneurs isn’t simply financial reward. They are in it for the long-term and have very positive plans for their businesses. Pursuing a passion is the biggest motivator for starting their business (42%) followed by a desire to be their own boss (37%) and to pursue a “side hustle” (36%).
  • Insurance protection gap: These are not brick and mortar operations and require different coverage than more traditional commercial insurance, however the survey found that insurance take-up is patchy 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% of owners recognize they need insurance, 44% either don’t have any coverage, are unsure or explicitly do not know what they are covered for by their insurance, suggesting 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: “Despite the uncertain climate, home-based business owners are incredibly optimistic about the future. With almost half of all respondents confidently expanding their businesses, our research also suggests that many would welcome more support. There is certainly more the insurance industry can do to help these entrepreneurs realize 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 design

About alastair walker 10925 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.