In pre-COVID times, a percentage of business owners chose to run their business from home because of the lifestyle benefits of managing family and work under one roof, whilst others made the choice to create a home office because of the lower overheads. Since the outbreak of the pandemic has had an impact on the way many businesses operate, though, working from home is far more common and, in some industries, the only way to move forward and operate a company.
Whatever your reason for working from home is, it’s important to check the insurance cover you have to make sure that you are properly protected and you are not running the risk of putting you or your family in financial trouble.
Sure, your home and contents may be well insured, but that doesn’t mean you are completely covered to run a home-based business.
How to Avoid Potential Risks of Running Your Business From Home
Although running a home office can seem like a safe way to do business, there is potential for risk that should be properly considered – and avoided.
- Personal injury
Anyone running a home-based business should pay special attention to this risk – because the costs and legal ramifications can be enormous..
If any visitors to your home office – and that includes delivery drivers dropping off or collecting products – suffer some kind of injury within your premises, your legal liability to pay compensation is a real concern that could end up costing you a fortune.
While this type of claim is usually covered within the public liability insurance that should be included as part of your regular home and contents policy, not every policy is the same – and compensation for business-related claims will not be covered without specific insurance designed to cover business-related liabilities.
You may not have clients visiting your home-office premises but that still does not make you completely immune – especially if a supplier, delivery driver or other business-related visitor injures themselves while at your premises.
To protect yourself thoroughly, talk to a trusted insurance broker or insurance provider about comparing business public liability insurance policies to find the best cover for your circumstances.
With this added protection, if anyone receives an injury or suffers property damage while visiting your premises for business-related purposes, you will be covered, if liability is determined to rest with you.
- Property damage & theft
Running a business from home doesn’t automatically mean that your business-related contents are covered by your regular home contents insurance policy. Always tell your insurance provider that you are running a business from home and check what is covered under your regular home policy and, importantly, what is not covered.
Although some home contents policies do offer limited cover for business contents, it is critical to understand the boundaries of the policy, which may be outlined as a percentage of the total sum insured, or in dollar terms.
By knowing exactly what cover you do have, you can analyse the risks this opens you up to and make a decision to suit your business model and budget.
- Other potential risks
Depending on the nature of your home-based business, your specific insurance needs may vary. Consultants, for example, should consider having professional indemnity insurance in place to protect them from any claims related to the advice a client receives. Income protection insurance is another cover to think about – especially if you are the main breadwinner in your household.
With many income protection policies including special conditions for people who do work from home, talking to your insurance broker is recommended, to ensure you are not doubling up on cover – and premium payments.
Protection that saves you money
Insurance is an expense but, by bundling different insurance policies together and exploring comparison rate websites online, business insurance does not have to cost a lot – and it can save you money by protecting you from expensive compensation pay-outs.
With more and more people making a permanent choice to run businesses from home, being clear that you have the right insurance in place can protect your business – and your valuable assets – in case there is a claim against you.
If you are new to business, be sure to include insurance premiums as part of your ongoing business budget, to ensure you get off to a positive start, without any costly, unwelcome surprises.
By giving you more time to spend in your own home and less money to spend on commuting, running a home-based business can be part of a smart savings strategy that can help you save for your first property – or pay off your existing mortgage even faster.
For more information about how running your business from home may affect your mortgage, talk to our home finance experts at Lending Specialists today.