Recent research has revealed that one in six Britons runs an online retail business from home, with 75 per cent using their domestic dwelling to store their stock.
And that figure doesn’t include home-run businesses in sectors outside of retail. According to the Office for National Statistics (ONS), 367,000 people have become their own boss in the past five years alone.
Unfortunately, research also reveals that arranging insurance doesn’t rank too highly on a home-run business owner’s to-do list, with many assuming their home contents insurance will cover their stock or equipment.
Don’t Fall Victim to an Invalid Insurance Claim
But it’s an assumption that could cost them dear, because failing to tell a home insurer that you run a business from home could invalidate a claim.
It is sometimes possible to get business equipment such as computers covered on a home contents policy, but you need to declare it and advise the insurer of its business use and your reliance on it. Stock or specialist equipment are another matter, however, as are other types of insurance that businesses should, and must in some cases have in place.
How Long Could you Survive Without Your Home-Based Livelihood?
Imagine if your stock was damaged or lost altogether due to a fire or flood, or if the equipment you rely on to produce your products was stolen. How long could you survive without your income? Could you afford to replace everything yourself and get your business back up and running? Precisely why the importance of arranging the right type of business insurance should not reside at the bottom of the task list – in fact, it’s crucial to make it a priority.
A Brief Checklist for Home Business Owners
- Call your home buildings and contents insurance provider or broker to advise them of your working situation and nature of your operation and check precisely what you are covered for, or can be covered for.
- If you design, manufacture or distribute products, arrange cover for loss or damage to your stock, equipment and fixtures and fittings. Also ensure you have adequate buildings insurance cover and seriously consider product liability insurance to cover you for any claims arising from loss or injury due to flawed products.
- If you employ staff, you will need to arrange employer’s liability cover – it’s a legal requirement unless the staff member is a close family member.
- If you receive visitors to your home based business, or visit clients at their premises, you will need public liability insurance.
- Think about how you would survive if your business operation was interrupted or you were forced to cease trading and look into business interruption insurance which will cover you should this situation arise.
Insurance: Make it a Priority
If you run a business from home, have recently become or are considering becoming a home-based business owner, we urge you to make arranging adequate insurance one of your top priorities. We appreciate there is a great deal to think about, but what could be more important than protecting what you’ve built up or are about to embark on building?
All the insurances mentioned can usually be arranged on a simple low cost Home Business package policy. For friendly advice on such policies, please get in touch.