Posted: Thu 10th May 2012
Britons spent a staggering £5.86 billion shopping online in March alone this year*.Auction sites such as eBay and online marketplaces like Alibaba make it easier than ever for the homeworker to set up stall and compete with global retailers. But just because you work from your spare room or kitchen table doesn't mean that you're not a real business with real business needs. And if you think your home contents insurance will cover you, then think again. Insurers will regard you as a retailer if your business could technically be run from a shop. This means you won't have any trouble getting the cover you need.
If you sell online, then the answer is clearly yes. Your home contents insurance won't cover your computer for business use, so you'll need to think about business equipment cover. If you take your computer and phone out and about with you, then make sure you have cover for this, too. Tip: A standard policy may not cover you for computer breakdown or data loss. Always keep a back up and consider an extension to your policy to cover for this.
Public liability will cover injury or damage to a person or premises negligently caused by you. If you visit one of your suppliers and they trip over your bag, you could be seriously out of pocket if they are injured and unable to work.
If the answer is yes, even if on a temporary basis to help you through a seasonal backlog, you will need employers' liability insurance. It's the law. Tip: There are a few exceptions, such as employing family, so check with your insurer.
If so, have you thought what would happen if somebody was injured by choking on a bead that fell off a bracelet you sold them? Product liability insurance will cover you for injury your products may cause people. Tip: It will also include damage to property caused by something you've sold or supplied.
If you use your own car for visiting suppliers, your motor insurance needs to be extended for business use. If you use a larger van for deliveries, you'll need to get commercial vehicle insurance. Tip: Your retailer's policy may automatically cover goods that you deliver with your own vehicle, but if you rely on carriers you should consider 'goods in transit' cover. This will protect your goods wherever in the world they are delivered.
Even if you keep it in your home, you'll need to insure it. It's unlikely to be covered by your home contents insurance, so talk to your insurer to see what's covered and what's not. Tip: Do you store stock in your garage or shed? Be security savvy and make sure your building is properly locked and alarmed.
Most businesses go bust after a major incident such as a fire or flood. Business interruption insurance will cover you for loss of profits and business expenses, as well as paying wages to your employees. Tip: Check out our guides to business risk and business interruption
Legal expenses cover will pay out if a disgruntled customer takes you to court because you've broken your contract or if you have a fall-out with an employee who wants to bring a case against you. Tip: You must always tell your insurer as soon as you become aware of a claim. *IMRG Capgemini e-Retail Sales Index This post was contributed by Enterprise Nation partner AXA Business Insurance
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