Working From Home and Business Insurance

Working from home is an increasingly popular choice for many people who may have found entering, remaining in or returning to the general job market a struggle. Parents wanting to balance working life with caring for their children are perhaps the most likely group of people to want to work from home, since doing so allows for maximum flexibility.

There is a whole range of businesses that can be operated from home, from will-writing, to copywriting, to ICT support and phone-based sales. Approximately two million businesses are based at home in this country. As well as being flexible, basing your business at home is much cheaper than arranging premises. You may well have to check with your local planning office as to whether or not you need permission to change the use of your home from ‘private dwelling’ to ‘business premises’ but other than that you can make your business fit around your home life without much adaptation.

However, it is important to remember that just because you are working out of the safety of your own home, there are still liabilities and responsibilities that you owe to your customers, the public and any employees. You will need to make sure that you have adequate employer liability insurance in place for all manner of situations that might apply to your business.

Special business premises insurance will probably be necessary to cover the building and contents that might not be covered by your standard home insurance. Indeed, if you are running a business from your home and there is a fire or theft, you might find that your existing home buildings and content policy provider refuses to pay out if they were not informed that you were running a business from home. That’s because running a business from home can increase the risk of theft or fire and your premiums won’t necessarily have reflected that risk. This situation can leave you without a pay-out for any part of your losses, whether or not they were connected to your business.

If you have any employees, you are legally obliged to have Employers’ Liability Insurance (if you don’t, you will receive a hefty fine per day) of at least £5million to cover potential claims made by your staff.

Public Liability Insurance standard cover offers £2,000,000 of cover and as it’s so hard to guestimate what kind of cover you might need, this is a fair level of cover to aim for. Other types of insurance can offer different levels of cover depending on the type of business you’re running and the value of the things you want to insure. So for example, if your business is mainly office-based, you can estimate the value of your office equipment and the time it would take you to replace any lost data. If you keep stock at home (e.g. if you are in sales) then you can easily place a value on the maximum amount of stock you’ll have at home at any given time and buy sufficient insurance to cover it.

You can even choose to take out ‘business interruption insurance’ to cover periods when you are unable to carry out your business but still have overheads to meet like wages.

Even if you get separate business insurance, you must inform your home insurance company that you’re operating a business from home or you might find that your home insurance is invalid. Similarly, check that your car insurance doesn’t just cover you for social and domestic purposes and that it does in fact cover you for business travel.

Finally, if your business involves any kind of expertise offered to clients, you should also get Professional Indemnity Insurance to protect against claims that you have been negligent in the advice offered.

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