Run a business from your home? Get home business insurance

With 60% of new businesses started from home due to reduced overheads and increasing numbers run via ebay, it is important to be aware that your standard home insurance will unfortunately not cover you should you suffer any kind of theft, damage or liability claims.

So what cover do you need and what makes up a combined specialist home business insurance package?...

Buildings and contents insurance

Your buildings insurance is less likely to be affected if you run your business from home, but even so it is important to keep your insurance providers aware of this fact so they can ensure you are covered for business use and evaluate any additional risk. What is more likely to be affected is the contents insurance. Depending on the type of business that you run you may hold critical stock or tools at your home, or own office equipment such as computers, printers, critical documents, etc which will all require additional insurance against possible loss, theft or damage. Some items may even need to be covered away from home also, for example if any tools or laptops are used off site.

Employers’ liability insurance

There are many reasons why you need employer's liability insurance... If you employ anyone else within your business that you run from your home (even if they do not work at your home) then you will still need to take out employers’ liability insurance. This will protect your business against any injury, illness or disease that may occur as a result of your employment both during and after service. Employers’ liability insurance is a legal requirement and is mandatory whether a member of staff is full-time, part-time, or contracted and there are many reasons why you need employer’s liability insurance. There are also some exceptions to needing this cover, such as publically funded organisations, companies where the owner is the sole employee and owns 50% or more of the share capital, or family businesses whereby employees are closely related. The standard minimum level of cover that any business must have is for £5m as any type of injury, illness or disease suffered could result in serious levels of compensation, potentially putting you out of business were you not covered.

Public liability insurance

You should consider taking out public liability insurance if anyone is likely to visit your premises in the course of business. It is not compulsory but is highly advisable in such circumstances, and many other companies will not even allow one of their employees on your premises unless this insurance is in place. Upon visiting your home business, a client or partner could easily slip and fall injuring either themselves or their belongings for which you would be potentially liable.

Professional indemnity insurance

If your business involves providing an advisory service to your customers, such as a financial advisor, solicitor or accountant, then professional indemnity can protect you against giving poor advice. In certain professions, such as those mentioned, this is a necessity as it can only take one act of unintended negligence, libel or slander to destroy a business. Depending on your business sector, often your customers will specify the level of cover that you need so you can look to them for guidance on this.

Product Liability insurance

If your home business creates products that could potentially injure someone or be at fault then product liability insurance will protect you in this area. Most supermarkets doing business with you will have this as a standard requirement before accepting your products for sale so often insurance in this area is not by choice.

Business interruption insurance

Business interruption insurance is necessary to cover you for any loss of profits or revenue whilst you are out of action for any reason. Most commonly such insurance is needed in the case of a fire to your home and will cover the loss of earnings during the period taken to resume business as usual. For a truly reasoned view on business interruption insurance you should also consider potential business growth and competition during this period.

Specialist insurance brokers can provide a combined Home Business Insurance policy to cover each of the elements outlined above that are appropriate and relevant to your business with the help of expert advisors.