You’ve taken the leap and finally started up a business at home. Sitting in your makeshift office in front of your laptop, it’s understandable that you might think your risk is minimal. You don’t have to deal with the physical safety hazards an employee might, nor do you have a big commercial premises or a large team of workers to worry about.
However, running a business from your house has its own unique set of risks. For instance, you might offer home maintenance services and keep your tools in your garage, or design websites and require only a computer – you are still running a business, and rely on your equipment to be able to do your work. Consequently, getting a comprehensive business insurance policy should be your first order of business when setting up a company, even if you run it from home.
Here are some of the types of cover you might need:
Business contents and stock is often not covered by standard homeowners insurance and you will require a separate policy.
Contents and stock
According to the Department of Industry, Innovation and Science, one of the biggest mistakes a home-based business owner can make is to assume the because you are operating out of your house, your business will be covered by regular home and contents insurance. Often this is not the case, so you will need to take out a specialised cover for the items in your house that you use to conduct your business. Having a business insurance package that covers contents and stock means that if, for example, your work computer is stolen or a disaster destroys your products, you will be protected and able to recover your losses.
As a self-employed person, you do not have sick leave or workers compensation to fall back on if something happens and you are left unable to work. Even working at home, you face risks to your wellbeing. As a result, you need to have other means to protect your livelihood while you are ill or injured. Personal accident insurance gives you the security that if you are temporarily or permanently incapable or running your business, you can make a claim and recover some of your income.
Professional indemnity and public & products liability
Like any other company, home-based businesses run the risk of being held liable for damages that result from errors, negligence or bad professional advice. This is particularly important if your offer services, such as lawn mowing, painting or hairdressing. If you make a mistake your customer could take legal action against you, and this can have serious consequences for small businesses. Professional indemnity protects you from the financial burden if this happens. Similarly, if your business supplies products, you will need cover for public and products liability to protect you from claims in the event that one of your commodities causes property damage or personal injury.
For more information on getting cover for your home business and the business insurance packages we offer, contact MGA Insurance Brokers.