There are lots of benefits to running a business from home, including the five second commute, flexible hours, and casual office wear. But just because you can work from home in your pyjamas doesn’t mean that you should get too relaxed. Before you start trading, make sure your home and business are properly protected.
Four of the most common types of insurance for home-based businesses are:
• Contents insurance
• Public liability insurance
• Employers’ liability insurance
• Professional indemnity insurance.
You’ll probably already have contents insurance in place, but you must notify your insurer that you’re going to be running a business from home.
Most home contents insurance policies will include business equipment as standard, but the level of cover differs significantly between providers so you should make sure that you have the right amount of protection.
Valuable stock and business cash won’t usually be covered by your household insurance policy; if you’re likely to be keeping these at home, you may need a specialist product.
If you have regular business visitors, you’ll need to let your insurer know, as most will consider this to be an increased risk, and will adjust your premium accordingly.
Public liability insurance
If you have do visitors to your home for business purposes, you should also consider public liability insurance. It covers you in the event that a person is injured in some way by your business, or if you damage another person’s property when carrying out your work.
Employers’ liability insurance
Most people who run a business from home work alone. But if anyone does work for you – including full and part-time staff, freelancers or volunteers – you are legally obliged to have at least £5m of employers’ liability cover. Employers’ liability insurance pays compensation if someone you are directly responsible for is injured as a result of working for you.
Professional indemnity insurance
If you provide a service or advice to customers that they pay for, you should consider buying professional indemnity insurance (PII). PII will cover the legal expenses needed to defend a claim from a client who feels that you’ve made a mistake or cost them money, and will pay any compensation due.
There are many other types of insurance available that you may want to consider for your home-based business. Many insurers offer business insurance packages that include the most common types of policies as standard, with the option to select additional cover as required.
Speak to a broker for advice on the types and levels of cover that your home-run business needs.