Insurance Types for Home Businesses

Starting a home-based business is an option for many entrepreneurs, and there are plenty of advantages – you get to save on premises costs and you get the added convenience and flexibility of working from home.

However, don’t let the comfort of your own home lull you into a false sense of security – there are a number of precautions you should look into to protect your equipment, your business and yourself. There are risks in any business environment and insurance is one of the ways you can mitigate them. There are various types of insurance available that might be worth considering for your home-based business, and an insurer should be able to tailor a package to suit your needs. Here are some of the options.

### Contents and buildings insurance

Presumably, you already have contents and buildings insurance for your home – if not, then you need it as soon as possible. Many insurers offer discounts if you take both types of cover with them.

Look closely at your contents insurance policy because you might need to amend it to cover the equipment you use for business. If in doubt, talk to your insurer and let them know the equipment you have, what you use it for and whether you need to have any special cover for it.

Also consider the items you use when you’re out and about on business, such as a laptop or tablet computer, your mobile phone or other equipment you use for your services, and look into getting special cover for those while you’re away from home.

As far as your buildings insurance is concerned, some insurers offer a combined policy covering both your home and your home office, protecting you from damage caused by fire, flood, etc – so check your current policy and consider whether that’s something you need to look into.

### Employers’ liability insurance

If you’re taking somebody on to work with you at your home, whether full-time or part-time, temporary or permanent or even on a voluntary basis, then employers’ liability insurance is a legal requirement. This rule includes non-contract and sub-contracted staff. However, there are some exceptions – if all your employees are members of your family, for example, then you won’t necessarily need it.

Employers’ liability insurance offers protection against claims for injury, damages or loss from employees. Your policy needs to cover you for at least £5 million, even if you have only one employee. You can be fined £2,500 for every day you are not properly insured. You can also be fined £1,000 if you don’t display your employers’ liability insurance certificate or refuse to show it to an inspector when asked.

Professional indemnity insurance

Whether you work from home or not, your business might require professional indemnity insurance if: you belong to a professional body for which professional indemnity insurance is compulsory; you give advice to clients; you provide professional services; you handle confidential information or the intellectual property of others.

Some clients might require you to have professional indemnity insurance before they’ll agree to work with you. It covers legal costs, expenses and compensation if a client claims you have provided inadequate advice, services or designs. It protects against things like professional negligence, loss of documents or data, unintentional breach of copyright and/or confidentiality, defamation and libel and loss of goods or money.

### Public liability insurance

You might consider public liability insurance if you have clients visiting you or if you regularly visit them at their homes or places of business. It’s to protect you in case a member of the public suffers injury, damage or loss as a result of your business. It can cover you for compensation claims relating to loss of earnings, future loss of earnings and damages, as well as legal costs you might be required to pay. As with professional indemnity insurance, some clients might require proof of your cover before they will do business with you.