“The shop is on fire.” Those were the words Jim England heard when he answered a call from his daughter-in-law on a Saturday in May 2013.
Jim and his wife, Teresa, were in Bangor attending an expo to promote their business, The Woodshaper Shop of Maine, when they got the call.
“I didn’t know what I would see when I rounded the corner to our house in Dedham,” said Jim.
He recounted seeing a column of smoke as he got closer to his property and arrived to find “a lot of activity and firetrucks.” His first thoughts were, “OK, what do we do now?”
Fortunately no one was in the two-bay garage when the fire broke out. The building housed tools, equipment and inventory for the couple’s hobby-turned-business when Jim faced an early retirement at the age of 60 due to a health crisis. It was that burning structure where Jim had manufactured wooden creations for homes and gardens such as toys and trellises.
The Englands immediately contacted their insurance company to report the fire and to start the claims process so they could clean up and rebuild. It was then that they realized they made a mistake that many home-based businesses make.
They had not taken out a separate policy for their business, thinking their homeowner’s policy would cover the loss.
At first their agent was confident the loss would be covered under their homeowner’s policy, until he saw the website for their business. The Englands explained that they had just started the business, only had a few sales and the building was still part of their home. The insurance company denied their homeowner’s claim.
So began a long and painful journey involving adjustors and negotiators. The building sat in ruins for more than a month while the process dragged on.
“It was my biggest learning lesson in 20 years,” said Jim. “Anyone in business, even someone just starting out, needs to make sure they have the right insurance. Don’t assume your homeowner’s policy will cover your home-based business.”
Eventually the whole matter was straightened out. The cause of the fire was determined to be electrical. The Englands suspect the squirrels they heard scurrying around in the ceiling may have had something to do with it. (Said squirrels were unavailable for comment.)
An insurance claim eventually came through and the Englands rebuilt a shop that is better equipped to handle their growing business and production demands.
No one thinks it can happen to them. But it can happen to you. Take the time today to make sure you are properly insured.
- Contact your insurer to review your policy to be sure it is the right policy for your business operations and location.
- Review your policy with your insurer annually or any time there is a substantial change to your business (such as relocation or acquisition of a new asset).
- Consider “business interruption” insurance to reimburse you for income lost if you are unable to operate your business for a period of time.
Business has been good for the Englands since they rebuilt. Their products are selling well and recently were featured in Down East Magazine. They are gearing up to exhibit at the BDN Maine Garden Show this spring. But the lessons learned from the fire and their recovery stay with them.
Jim talked about a conversation he had with a neighbor who also operates a business out of his home. Jim asked him, “Do you have insurance for your business besides your homeowner’s policy?” The neighbor admitted he never gave it a thought.
Thanks to Jim, his neighbor did give it a thought and won’t have to learn the hard lessons that the Englands learned.
For information about business insurance visit The Maine Bureau of Insurance at www.maine.gov/insurance.