The government estimate that 2.9 million businesses are operating from home in the UK and, since the coronavirus pandemic started, this is only set to increase. However, one area that's often neglected is business insurance cover, and that's where we come in!
Our team of expert business insurance advisors are here to understand your specific risks and compare home-based business insurance quotes from up to 10 of the UK's leading insurers so that you can find the right cover at a price.
Whether or not someone needs insurance for their home-based business is a common question, and the short answer usually is yes, but it very much depends on what your business is doing.
If you work from a home office, chances are you will have business equipment, computers and even stock, that you will need to protect against perils such as fire, flood or theft in the form of commercial cover.
Often, home business owners assume that as this is in their home that their home insurance policy will cover any damages. However, this is often not the case, and in some situations, not alerting your home insurance provider that you are operating a business at the address can invalidate your insurance. In this case, you will need to set up separate cover for your home business.
If your business employs staff, whether they are based at your home or working remotely, then you are legally required to arrange employers liability insurance which provides cover for claims received from employees for injury or illness as a result of their employment. A common claim for homeworkers is repetitive strain injury (RSI) as a result of using unsuitable equipment.
Also, if you travel from home to client premises, or if you have any visitors to your home you should consider including public liability insurance cover. Public liability provides cover for your legal liability in respect of injury to clients or members of the public, typical claims will include incidents such as slips, trips or falls.
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Numerous professions or trades
Business Buildings Policy
Sole Trader, Partnerships, LLP and Limited Companies
Office Contents, specialist items, computers, fixtures & fittings, business stock
Laptop, tablet, mobile phone or specialist equipment away from the office
Business Interruption (loss of fee income)
Legal liabilities up to £25m Indemnity (Public Liability, Employers Liability & Product Liability)
Legal Expenses, Business Travel & Personal Accident Extra Cover
Professional Indemnity & Management Liability cover option
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Many home business owners believe that their regular home insurance will cover their business contents and any accident that occurs due to their business activities- this is not always the case. Business insurance requirements vary from business to business, so it's important to talk with a dedicated business insurance advisor before setting up shop at home.
As with other non-home-based businesses, there are a set of key covers you should include in your insurance policy. Recommended covers include Public Liability Insurance, Professional Indemnity Insurance and Business Equipment & Contents Insurance policy.
There are three types of business insurance policies you might need if you are operating a business from your home.
Public Liability insurance will protect your business from financial losses following a compensation claim for third-party personal injury or property damage. In the event of a claim, your policy will respond and cover both legal fees and full compensation payments up to your level of indemnity. Public Liability is a standard part of most business insurance policies.
Your regular home cover will contain a Public Liability section for regular visitors; however, may not extend to business visitors.
Your Business Public Liability insurance will also cover you in cases of accidental damage to property or third-party injury when you are working outside of your home. For example, if you visit a client site for a meeting or to carry out work on their property. Our specialist team can make sure you have adequate insurance for your home-business activities that will shield your business from both legal fees and potential compensation costs.
Professional Indemnity insurance will cover you for professional negligence claims concerning work you have carried out. If you offer advice as part of your professional service, you have a heightened duty of care to your clients. Because of this, your clients can take legal action against you if they believe you have been professionally negligent. Having a comprehensive Professional Indemnity Insurance policy means your insurer will cover both legal costs and compensation payouts in the event of a valid negligence claim.
If your home business is an e-commerce business, you should also consider Products Liability Insurance. If you are manufacturing, designing or distributing physical products, Products Liability cover comes highly recommended. You can purchase Products Liability alongside your Public Liability insurance.
As a business, you will need specialist cover for your property and office equipment. Protect yourself from the cost of perils such as fires, floods and theft with business buildings insurance and contents insurance. Business contents insurance is separate from your home contents insurance, so don't assume that your business or office equipment will all be covered automatically under your regular home contents policy.
An all-risks policy can even cover your business items when you're working away from your home office. For example, while on a business trip, your work laptop and mobile phone suffers accidental damage or is stolen.
Business buildings insurance covers the building your business is based in from insured events. For example, you erect a purpose-built office space in your garden which may not be covered under your standard home insurance. Business buildings insurance will cover both the cost of the rebuild or repair of your business premises in the event of a disaster.
If you are running your business from your home address, you will need to inform your insurance provider. There are times when this will impact your regular home insurance so, making sure that everything is out in the open with your insurer is the safest bet. If you do not, you run the risk of invalidating your insurance. Even if you are only completing clerical work at home, transparency is critical.
If a business-related accident were to occur, you might find yourself uninsured. For instance, while you may have a Public Liability policy in your conventional home insurance, your insurer may not respond if the claimant was a client there on business.
A couple is operating an online marketing business in a purpose-built office in their garden. During a period of adverse weather, a nearby river burst its bank and floods the surrounding area, including the couple's office along with £5,000 worth of computer equipment.
Fortunately, in addition to the office equipment protection, the client had also arranged business interruption cover which included "increased cost of working" which funds them to temporarily set up in a nearby serviced office until repairs are complete.
At Insync, our team of insurance experts can provide advice on what kind of cyber cover, if any, that your business needs. Cyber cover protects your business from financial losses and any third party liability claims as a result of:
If you are doing office work exclusively at your property, the cost of home business insurance is often relatively low. Naturally, however, the price will increase with higher risk activities. While the range of activities is limited for a business at home, certain businesses will come with higher risks such as:
Costs will also be dependant on things such as the value of your equipment, annual income and location of your home. Your contents insurance premium may be more expensive if you are in an area with a greater risk of theft. Similarly, if you are living in a high value or listed building, your general business buildings insurance premium may be higher.
Under HMRC's guidelines, all business insurance is considered an allowable expense. Find out more about allowable expenses here
There are various insurance products you can include in your business insurance. Insync is here to help you explore your insurance options, including:
Some standard home insurance policies will provide cover from a small element of office or business contents. However, this is often quite limited and generally intended for occasional home workers.
Conventional home insurance will not extend to other perils such as Public Liability, Employers Liability or Business Interruption claims. If you operate your own business from home, then you should look to purchase specialist working from home insurance.
If you are working from home for an employer during the coronavirus pandemic, you shouldn't need to purchase extra home insurance.
However, depending on what kind of work you are carrying out at your property, you may want to check with your insurance provider.
In many cases, Employers Liability insurance is a legal requirement if you take on any employees. Home businesses are no different. However, there are a few exceptions. If you exclusively hire immediate family members, you may not need Employers Liability insurance.
For instance, you are running your business from your home office, and your spouse helps you as part of the company; you would not require Employers Liability. Meanwhile, if someone outside of your immediate family were to carry out the same tasks - you would need Employers Liability.
Without the correct insurance, the government can fine you £2,500 for every day you are not adequately insured.
If you are a self-employed individual or partnership, you might want to consider Personal Accident Cover as an extra insurance option.
Life can take us by surprise, and sometimes injuries can take us out of work for a while.
Personal Accident Cover can provide peace of mind for self-employed people while they recover from injuries sustained in an accident regardless of whether it was work-related or not.
Personal Accident Insurance can also provide a lump-sum payment in the event of a life-changing injury or accidental death.
In most cases, business use is defined as something that is done at home for financial gain in a continued or repeated way.
According to research from DL4B, an estimated 8 million people in the UK run an internet or online business from home. Alongside standard cover for computer and business equipment, an eBay or Amazon seller may also require cover for stock and materials such as packaging.
However, probably the most critical area of cover is Products Liability Insurance. Should a buyer or other third party suffer personal injury as a result of the physical product that you have supplied, they may seek financial compensation from you as the seller. Without adequate Products Liability cover, you would be personally liable for any losses, which could run into tens of thousands of pounds.
When purchasing Products Liability cover, you should also check that cover does not exclude goods supplied from the far east if this applies to your business.
While Insync does not supply individual car insurance, we can provide Motor Fleet insurance for businesses with five or more vehicles or, in some cases, we will consider businesses with only three or more vehicles.
If, like many home-businesses, you will be using your personal vehicle for business purposes - you should inform your existing car insurance company and update your existing policy details for business use.
Insync Insurance Solutions Ltd
9 Albany Park, Cabot Lane
Poole, Dorset BH17 7BX
t. 01200 309516
© Insync Insurance Solutions Ltd 2020 All rights reserved. Insync Insurance Solutions Ltd is authorised & regulated by the Financial Conduct Authority where our reference number is 766691. Our registered office is Midland House, 2 Poole Road, Bournemouth, Dorset BH2 5QY and we are registered in England under company number 08810662. Should you have cause to complain, and you are not satisfied with our response to your complaint, you may be able to refer it to the Financial Ombudsman Service, which can be contacted as follows: The Financial Ombudsman Service Exchange Tower, London, E14 9SR | Tel: 0800 023 4567 or 0300 123 9 123 | www.financial-ombudsman.org.uk | Privacy Notice | Terms Of Business