Running a small business from home should be straight forward. Make a product or supply a service, invoice and hopefully get paid the following month. However it starts to get a little tricky when the word ‘insurance’ is used. As a self employed person, a sole trader or the owner of a limited company we need to protect ourselves for every eventuality.
Whether we can afford to do this when first starting out is another question and is ours alone to decide. Insurance cover does not come cheap but we need to prioritise our outgoings in order to put food on the table and buy materials for our business.
Here are the most common forms of insurance you may need for your business:
This policy is for business machinery and equipment affected by theft, fire and any other damaged. If part of your home is registered for business use that too can be covered. Business equipment that is used outside the home such as mobile phones and laptops should also be provided for.
If you employ staff you are legally obliged to have employer’s liability insurance. Self employed and sub contracted staff will have their own cover, ask to see this and keep a record of their policies. Cover for you staff can be for £5 to £10 million pounds depending on the policy. This will protect your staff if they should suffer injury or death whilst working on your behalf.
If there is a time when you or your business is accused of professional negligence this policy will cover your defence and any damages that are awarded against you. Consider the worse scenario when calculating the cover you require.
Public and Product Liability
This is an important policy to consider if you deal with the public whilst carrying out your business. This may occur in the customer’s property or your home. It may be a service you have carried out or a product you made. A claim against you or your business could run into many thousands of pounds. Public and Product liability insurance will give the business owner peace of mind.
Directors and Officers
This is for directors and officers of companies. The policy defends you against allegations and charges made to the company that you are part of. Charges such as wrongful acts or damage are covered along with legal costs.
Working for yourself means that if you are ill or injured your income will suffer. How will you pay your mortgage if you are unfortunate enough to fall foul of a lengthy or even a terminal illness? Income protection will give some peace of mind during times when you are unable to work.
Cover can be for any sum and really depends on how much cover you require and how much you can spend each month on the policy. Read the policy small print carefully as sometimes the self employed are not covered as comprehensively as those who earn a set wage each month.
When deciding on the cover required for your business take time to look at as many providers as possible. Ask yourself if you really need everything on offer or whether cover can be designed for your business to suit you. Many of the above insurance covers are grouped together in one policy which makes it cheaper to purchase.
When collecting quotes don’t forget to ask the company who cover your home and family insurance if they also provide business insurance then ask for a discount.
Always check that your home insurance is not void by your working from home. It may be possible to simply add an extra clause to the home building and contents cover for your business needs.