Insurance insights: common insurance mistakes.(Professional Resources)

As busy music professionals and business owners, sometimes there are numerous business issues that have to be completed before you even can begin teaching. Setting up the studio, ordering music, purchasing instruments, scheduling appointments and much more is involved just to get started. With all these items that have to be done, purchasing insurance is just another job on the "To Do" list. While it may be tempting to contact one insurance agent, accept the first policy offered and mark the task off your list, it's not the best approach. When purchasing a policy, making assumptions about the coverage can cost you and your business. As with all insurance plans, the policy detail is truly the bottom line for coverage.

The first and possibly biggest mistake some businesses, as well as individuals, make is having no coverage at all. As shocking as it sounds, many businesses and independent professionals simply are not insured. By not carrying a general or professional liability insurance policy, you will be leaving yourself or your business wide open to several different types of exposure. Many home-based business owners mistakenly believe their business will be covered under their homeowner's policy, but do not take the time to check until someone gets hurt or sues them. Statistics from the National Association of Home Based Businesses reflect that there were between 55 and 60 million people working from home in 2001, and one-third of them were considered home-based businesses.

Another frequent insurance mistake is purchasing inadequate coverage. As a self-employed music professional, your focus should remain on your business and your music--not insurance. However, general or professional liability coverage should cover your activities, as well as your premises. Be certain to check the coverage and ask questions so you can understand the policy details.

The most commonly overlooked and under-purchased business insurance coverage are commercial automobile, employment practices and disaster policies. ...