When you ask an insured where they work or what they do for a living, what kind of answer are you getting? “I work at XYZ Computer Corporation” or “I’m a business consultant”.
Have you asked WHERE they physically perform their job? The answer may be different than you’d expect. In fact, odds are, they’re working in their home and you can capitalize on that.
ARE HOME-BASED BUSINESSES PREVALENT?
There are 28 million small businesses in the US according to the US Census Bureau. And a remarkable 52% of these businesses are home-based. This may include photographers, eCommerce sellers, business consultants, etc.
An astounding 60% of these home-based owners don’t have adequate insurance. That’s over 8 million businesses without suitable insurance. And how about this, that number does not include the 58 million freelancers.
The landscape of the workplace has changed; now home-based businesses are prevalent. This sweeping lack of insurance is
E-COMMERCE EQUALS PROPERTY INSURANCE SALES
You’re talking to a prospect who mentions that she’s been making a nice living selling things online. The prospect goes on to tell you about working out of her home. This should stop you in your tracks, it’s time to ask some key questions: Is this her main business? What types of things is she selling? She may be vulnerable to a loss. Depending on the amount and value, her inventory may not be covered by her homeowner’s policy. How bad will she get hurt if a fire in her home causes a complete loss?
This prospect has given you an opportunity to have a conversation about her home-based business’ need for property insurance. You may convert her because of the expertise you have to offer. This is a prime opportunity to increase your revenue.
ARE YOU UP TO FINDING ADDITIONAL REVENUE FROM FREELANCERS?
As mentioned previously, there are 58 million freelancers in the US. Chances are most of them aren’t insured. This is a great opportunity to ask your insureds if anyone in their home is freelancing. It all goes back to the “where do you work” question. Typical freelancers include writers, photographers, graphic artists, etc. Many of them are part-timers and have never considered insurance. Think about it, you probably already know someone. Working with them is an excellent way to start another revenue stream as well as open the door to look at their personal insurance.
Many of these professionals are involved in producing creative products. In the course of their work, they may inadvertently infringe on a copywrite. They may not even realize they infringed nor understand the severity of the consequences. The list goes on as to what a freelancer might do that warrants both freelancer’s’ indemnity or E&O insurance. This is pretty much an untapped market. There are many forms of insurance that these folks need and you’re there to help them. You may not be able to convince all of them right away but sometimes planting the seeds grows income down the road.
HOMEOWNER’S VS HOME-BASED BUSINESS OWNER’S GL POLICIES
It’s tax time and you go to see your CPA. He recently moved his office to his home. The first words out of your mouth should be, “Have you checked to see if your homeowner’s policy will cover your liability?” He’ll probably scoff at you. But this is an opportune time to increase your income and point out that his home policy may not cover him if a client trips over his mat, falls and then sues him. Think upsell and discuss an in-home business policy. This could protect his important records as well. And don’t forget, there’s that add on umbrella.
A massage therapist who operates out of her home one or two days a week is also vulnerable and probably has not thought about GL insurance. But you’ve thought of it. This doesn’t just apply to those insureds who provide services. That eCommerce seller probably has people coming and going in her house making deliveries. While you’re selling her property insurance, discuss GL and wrap it up in a nice BOP or in-home business policy.
WHEN SHOULD UBER CALL YOU ABOUT INSURANCE?
When asking the question “where do you work”, it’s also very important to ask, “where do you drive”? Obviously if an insured is using their car for their home-based business, they should have a commercial auto policy. When they talk about their home-based business double check that their car is staying parked in the driveway.
But what about the rideshare drivers? Identifying Uber and Lyft drivers could give you additional income. As prevalent as the profession is becoming, the “Is anyone in your household a rideshare driver” question should be on the check list. That not only opens the door to more revenue but starts a conversation about additional personal auto coverage.
IT’S JUST A SIDE GIG, WHY DO I NEED INSURANCE?
Sure, that extra money is great from that part-time home-based business, but what about the extra exposure that has been taken on. Even if your insured tells you it’s only a weekend or evening gig, you can still make extra revenue by pointing out the risks. Does the woman just selling homemade soap take credit cards? Does she need cyber liability insurance? Another insured may mention they’ve been making extra money by writing and sending out a newsletter. Do they need cyber liability insurance too? They’re at risk of email or physical addresses being stolen. These may not be big dollar policies but adding an in-home business policy is an upsell. This may also create more loyalty since you were there with expert advice.
GENERATING INCOME AND PROTECTING YOURSELF…A WIN WIN
Home-based businesses are big and getting bigger every year. From GL and property policies to freelancer’s insurance, there are holes in coverages that you’ll be able to fill by asking key questions. By discussing an insured’s career, you are able to take an integrated approach and identify all the risks in their home-based business. By doing this you will not only be able to increase your revenue, but fulfill your E&O policy requirement. You’ll become an expert in home-based businesses. This has the potential to dramatically increase other lines of business for you as well. Remember, always start with the simple question, “WHERE do you work”?