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    Home business insurance guide

    More than 1.5 million people now work from home for their main job. This number is made up of remote workers, freelancers and those who run home businesses and looks set to increase drastically in the coming years. If you’re one of the many UK entrepreneurs who run their business from home – or you’re planning on soon becoming one – you’re probably here because you have questions about your home business insurance.

    Many people think that their business doesn’t need insurance if they work from home. Or that their home insurance policy will cover them if they need to make a claim. In most cases, both these beliefs are wrong.

    Businesses of all shapes and sizes, even home-based ones, need cover. In this guide we’ll explain exactly what type of cover you might need, and why relying solely on your home insurance policy may not be the best idea.

    Home business insurance risks

    Running a business from home comes with lots of benefits, including significant cost-savings. Unfortunately those benefits don’t usually extend to using your home insurance policy to cover your business.

    This is because businesses present a very specific set of risks that just aren’t included in home insurance policies. Really simple things like having customers visit your home, storing stock or working with specialist machinery will affect the kind of risks you’re open to, and thus the type of cover you need.

    Your contents insurance policy may provide basic cover for business equipment (such as laptops and mobile phones) but you will need to confirm this with your insurer. It generally won’t cover stock or very expensive equipment – you’ll need special business contents insurance for this.

    It’s also very important that you let your insurer know when you start working from home. Failure to do so may invalidate your current policy.

    Regardless of where you stand with your home insurance cover, businesses need additional home business insurance. These are business-specific policies, and some are even legally required.

    Here are the most common insurance elements required as part of your home business insurance:

    Employers’ Liability Insurance

    Should an employee become ill or injured as a result of their work for you, they can claim compensation. Employer’s liability insurance covers this and your legal costs so you don’t have to pay out of pocket.

    This insurance is actually legally required by any business that hires employees; even if you work from home and only hire temps and contractors. There are serious consequences if you don’t have adequate employer’s liability insurance, with fines of up to £2,500 for every day you’re not insured.

    Vehicle Insurance

    As you’re probably already aware, vehicle insurance is also legally required in the UK. Do make sure your current vehicle insurance covers business use - even if you only make the odd journey for work. If you don’t have the right insurance, any claims you make may be rejected and your policy rendered invalid.

    Professional indemnity insurance

    Also known as professional liability insurance or PI insurance, this covers you if claims are made against you by a client. This includes claims of libel and defamation, negligence, errors, omissions, breach of confidence, loss of money, misrepresentation and more. It will cover the legal costs of defending your business and any compensation owed to the client.

    This insurance is especially important if you work in an industry where you provide advice or education.

    Public Liability Insurance

    As part of your home business insurance public liability is extremely important should clients visit your home or if you visit theirs. It covers you if they are injured or their personal property is damaged by you and/or your home. If a customer trips and injure themselves whilst visiting your work place or you damage client property whilst working for them, they could make a claim for compensation. This insurance covers the legal costs and compensation associated with such claims.  

    Product Liability Insurance

    If you sell physical products, there’s a risk (no matter how small) the product could cause injury or illness to a customer or damage to their personal property. Product liability insurance covers the legal costs and compensation should this happen and a customer makes a successful claim.

    If you manufacture, repair and repurpose or sell goods with your brand name on, it is strongly recommended that you take out comprehensive product liability insurance.

    Don’t risk a claim without home business insurance

    Specialist insurance may seem unnecessary for home-based businesses but there are inherent risks that come with running a company. Insurance offers protection and peace of mind should anything go wrong. Without it, you will have to pay out of pocket for any claims made against you, which could be disastrous for your business and personal finances.

    If you run a home business, make sure you, your home, and your business are adequately protected with the right kind of insurance. Without the correct cover in place you will risk not being covered should an incident occur.

    Want to find out more about Bluedrop's Home Business Insurance?
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