Sunday, June 03, 2012

Buyer Beware

I just watched a funny skit on This Hour has 22 Minutes where people were going to great lengths to get a free cell phone – from losing an arm to giving up a kid.   Joking apart, it highlights how some industries will go to any lengths to make money and secure your business.  It is a competitive world out there.

Take the insurance industry.  A few years ago our broker advised us that we couldn’t get our house insured because I worked from home, and the only way they would cover it, was if I took out liability insurance.

No matter how I explained that the home was the administrative base, that no events or even people met there, the answer was the same. Even though the business is incorporated, they were apparently  “concerned” that someone might fall at an event and sue me, and the house would be at risk.  Reluctantly I agreed but it felt like a money grab. 

I know when I had my consulting practice we were required on certain contracts to have professional liability insurance, which was an expensive request, often in the thousands.  Again, we would argue that no one was in danger as a result of our work, we weren’t counselling anyone, just meeting with people to provide recommendations to government.  But no, it had to be in place.

Fast forward to this year, and one of our members faced the same challenge, instead this time the stakes were much higher and the cost prohibitive.  As she said, she could understand if they insured your home and if you didn’t get the liability insurance, you had to sign a waiver, but to outright refuse  home coverage unless you took out this expensive insurance policy,  felt like you were being held to ransom.

So what’s the answer?  Shop around.  There are reputable companies out there that will provide house insurance and forego the liability insurance if you work from home.  Don’t let yourself be conned or pressured into spending money on a policy that you don’t need and cannot afford.

It is somewhat ironic that we need insurance in order to protect ourselves from  unexpected dangers, but who protects us from the insurance companies?  We need to take charge of that ourselves.

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