The benefits of working from home are well documented. A familiar, comfortable environment, no commuting and fewer distractions are just some of them.
But when you’re self-employed, there are also a number of things that you miss out on. When you can only charge for the work you have done, any form of downtime is a serious issue, so having measures in place to protect yourself and keep downtime to a minimum is important.
Here are some measures you can take to keep you and your work in operation and keep earning money.
Your home computer, mobile phone, printer – all the equipment you need to conduct your business from the comfort of your own home needs to be protected, as without it your business will stall. While you may have home insurance to cover your contents, is this really suitable for your needs?
Home insurance policies are often designed to be comprehensive in cover, but not necessarily swift in their claims procedure and fulfillment, and the warranties you have on your electrical goods may be the same; they provide a replacement, but with no allowance for the quick turnaround which you need as self-employed/micro-biz to get back online.
This leaves you with two options: either upgrade the contents insurance for your entire home, or take out separate cover solely for the items vital to your business. This means sitting down and costing up your business-essential items and shopping around to compare prices, and it will probably cost you more per month. However, if you consider how much you could stand to lose in earnings for each day you’re waiting for your insurer to pay out, then it’s likely to be well worth it in the long run.
While proper protection is vital, it’s also worth highlighting how preventing damage wherever possible and how taking extra care of your essential equipment can prevent damage or breakage that can take you offline, such as regular cleaning, maintenance, being careful of spills and being wary about what you download will reduce some risks.
One of the major benefits of being a salaried permanent employee over self-employment is what happens when you fall ill. Most companies offer periods of sick pay at a full rate of pay, and even when that expires, Statutory Sick Pay provides some form of income. You don’t have that luxury when you’re self-employed and you are not well enough to work, especially for an extended period of time, you have no income coming in.
You might be able to put a contingency plan in place for a week off with the flu, or set aside enough cash to cover essential expenditure, a more serious illness could result in significant financial hardship. State benefits are available if you’re unable to work due to serious illness, but this might not be sufficient to meet your individual needs.
This is where income protection insurance can help. These policies provide you with a regular income while you are unable to work, so you don’t have to worry about meeting mortgage payments or bills, and you don’t have to draw any money from your business while you are unwell.
While medical treatment is obviously available for free from the NHS, some surgeries or treatments involve a waiting time – time which represents lost earnings. For this reason, many self-employed people choose to take on private medical insurance, which typically promises shorter waiting times, as well as beneficial treatment and support which can get you back on your feet more swiftly.
Critical illness insurance cover is also worth consideration. It pays a one-off tax-free lump sum should you be diagnosed with a critical illness; this payment can then be used to either shore-up your business or clear personal debts which are draining your income.
If you do decide to go for a variety of insurance plans it’s important to shop around for the best policies and see if you can combine them with one provider for a bulk discount.
Comparison sites such as InsureMe-on-Line are useful for measuring policies against each other and cutting through the terminology. But don’t just go by price; while value is important, other factors such as the ease of the claims process and the speed of claim fulfillment may be more relevant to you personally, especially when you need to get back up and running with your business quickly.