If
you are one of the UK’s fast growing number of home business owners, and share
the view of 145,000 others who mistakenly believe that their home contents
insurance will cover their business, it’s time for a wake-up call.
Recent
research by Direct Line for Business and Enterprise Nation has revealed that as
many as two in five home-run business owners aren’t insured at all, and 29%
don’t bother with business insurance because they think it’s only for big companies
or they believe their commercial activities are covered by their home contents
insurance because the business is based at home.
Beware flawed beliefs
However,
there are numerous flaws in these beliefs. Firstly, if you run a business from
home and haven’t told your home insurer, you need to do so immediately.
Otherwise you could find yourself with a rejection if you try to make a claim.
Secondly,
you need to realise that home contents insurance is unlikely to cover certain
business needs, like damage to or theft of stock, public liability or loss of
earnings due to business interruption.
If
you have clients visit you at home, it’s imperative you have public liability
insurance. Otherwise, if they injure themselves, or cause damage to property,
you are quite simply not going to be covered. This is a significant financial
risk to put yourself under considering the sums often awarded for personal
injury claims.
When
it comes to business equipment, it is sometimes possible to insure things like
computers on a home contents policy. However, fail to list such items
individually and declare their use and you could find your cover invalid. Other
equipment that is more specialist is definitely not going to be covered without
a specialist policy.
How long could you survive without your income?
As
a home business owner you need to give some serious thought to how long you
could go on should something happen to interrupt your business operation. If
there was a flood or a fire that damaged your stock or rendered your production
equipment unusable,
how long would it take to get back on track? What would you do for income
during this time?
Businesses need business insurance
Businesses
need business insurance: it’s as simple as that. You need cover that protects
against loss or damage to stock and equipment. Your building needs to be
insured for commercial use. And there are other types of insurance you should
think about too. Business interruption insurance will cover any financial
losses you make should you be forced to stop trading. Product liability will
cover any claims that arise from injury or loss due to product flaws. Public
liability is an absolute must if you receive customers or business contacts at
your home. And employer’s liability cover is a legal requirement if you employ
staff, unless the staff are close family members.
Running
a business from home? Pay some attention to getting your insurance cover right.
It could prove extremely costly if you don’t. If you don’t have an insurance
broker then talk to your bookkeepers who will point you in the right direction.
