Insurance for your home-based business

Published in Business Insurance News & Insights on Thursday, July 16, 2020

Having a flexible schedule and the ability to work for yourself may sound appealing. It's so appealing that according to the Direct Selling Association, more than 20 million people nationwide currently work for a direct sales company with estimated retail sales reaching $36.12 billion in 2015. Direct sales is just what it sounds like – selling a product or service direct to the consumer without a retail channel. Whether it's Avon, Tupperware, or stretchy leggings, direct sales has been gaining popularity in the age of social media.

Things to consider before becoming a direct sales representative

Making money from home may sound like an exciting venture, but if you're earning more than $2,000 a year, it's considered a business. And before starting any business venture, there are a few things you may need to consider. Be sure to thoroughly vet the company you're considering for your business.

• Product
  • Is the product you'll be selling something you truly believe in?
  • Is the product something your customers will need again, or is it something they may purchase only one time?
• Inventory
  • What are the requirements for inventory – will you be required to keep a large amount of products on-hand?
  • What happens to unsold or damaged inventory?
  • Will you have sales quotas you need to meet? Will you make money primarily from product sales or recruiting?
• Business Considerations
  • How will payment work – will purchasers make their checks out to you personally or to the company?
  • What are the tax implications of your new earnings?
  • What about home based business insurance.

Why business insurance is important for direct sales representatives

If you earn more than $2,000 a year at your direct sales position, it's considered a business. Like any business, a business insurance policy will protect you from any unforeseen circumstances. Although this aspect of direct sales is largely forgotten. Our insurance reps can help you determine what type of insurance coverage is needed for your business. Whether you need insurance for:

• Property damage – say you have a sales booth set up and something happens to your inventory. Without in-home business coverage, you would need to pay out of pocket to replace your inventory.
• Liability coverage – if you are hosting a sales party and one of your attendees is injured.

PDCM offers In Home Business Coverage. This type of coverage provides you with three different coverage options with business personal property and liability coverages as an endorsement to your policy.