Do you have the insurance you need for working from home?

As the number of people who work from home continues to rise, statistics from AXA Business Insurance suggest that the majority of the millions of homeworkers in the UK are, probably unknowingly, operating without the insurance cover they need and more than half are potentially breaking the law in the process.

According to a survey of 250 homeworkers carried out by AXA and enterprise Nation in October 2012, 16 per cent of homeworkers employ one or more people yet only 3 per cent have employer’s liability insurance. Meanwhile just 14 per cent of homeworkers surveyed say they have business car insurance, yet 66 per cent use their cars for business purposes. In both instances this would mean they are operating illegally.

And aside from the legal requirements of insuring yourself if you work at home, AXA is also warning people to be aware that they should inform their home contents provider if they are working from home or they could risk invalidating their policy.

For the 10 per cent of homeworkers who meet clients in their home, or the 30 per cent who visit clients’ premises, AXA advises that public liability insurance should be considered to protect against any accidents. Meanwhile, only 8 per cent have professional indemnity insurance to cover themselves for legal liability in the event of providing customers with poor advice.

One in four homeworkers admitted they were putting their businesses at risk through neglecting their insurance needs as they would not know how to fund any shortcomings if they needed to make a claim and had insufficient cover.

Darrell Sansom, managing director of AXA Business Insurance, said: “The number of people working from home has grown by more than 20 per cent in the last ten years or so but our research shows that these people take a more relaxed view on insurance than those working from business premises. We appreciate that generally there is no intention to break the law and that insurance is possibly not top of the priority list for many people. However, it is absolutely vital that homeworkers check what they need to be covered for and, at the very least, meet legal requirements. We would also strongly recommend that people consider what other cover they need to protect what is, in many cases, their livelihoods.”

Insurances to consider for a home-based business:

Employers’ liability

Although 84 per cent of the respondents had just one employee, this insurance is still mandatory, depending on how the business has been set up.

Motor insurance

If you use your car for business, then you need to declare this and amend your car insurance to cover business usage. Your private motor insurer may well be able to offer the cover you need, or you can buy a specific business insurance policy.

Contents insurance

If working from home, even for a portion of the working week, you must declare this to your insurer. You could invalidate your home insurance policy if you do not advise them.

Buildings insurance

Consider combining cover for your home and home office.

Public liability

If you go to clients’ premises, or they come to you, then you should consider this.

Professional indemnity

This is important cover for many as it pays out for claims of negligence or poor advice –

compensation and legal defence costs can be very expensive.

Product liability

If your business involves supplying products to the public, you will need this cover to protect you for claims against injury or damage from your goods. This often comes with public liability insurance.

Goods in transit

This will cover you for products or other items you send to customers. If you are using a specialist carrier, they may have a certain amount of insurance in place already but always check this, particularly for valuable items.