What your insurer needs to know about your home business

A few months ago Moneysupermarket.com followed up some comments here on the blog by writing a guest post on how working from home affects your insurance. Today they explain what an insurer needs to know about your home business when you’re looking for cover:

‘So you have decided to be your own boss and start your own business. Instead of looking at expensive commercial properties to let, where better to start out and grow your company than that of your own home.

‘According to research 60% of new businesses start from the home. That is 1,400 new businesses a week and currently there are over 2.1 million businesses in the UK, operating from home.

‘We have already talked about how working from home affects your home insurance here. Now let’s take a look at exactly what your insurer needs to know, when you are just starting out in the entrepreneurial world of running your own company from home.

‘Whether you decide to work as a photographer, a cake maker, a web-designer or a hairdresser, your business is now your livelihood and you need to protect it and if applicable, any employees accordingly. It is important that you tailor any policy to not only suit your individual needs but to also to obtain it at the best possible price.

‘So let’s take a look at some of the basics your insurer will ask you. First of all, once you have stated the main trade of the business, you will need to let them know how many people are employed at your business. This will include all directors, partners, employees and you. You are required by law to purchase employer’s liability insurance in the event that an employee, past or present, may hold you liable for any injury or disease they suffer in relation to your business.

‘Your insurer will need to know about your business stock and/or contents value. Do you have a number of computers/servers or maybe you have refrigerated stock for your food items. You will also need to make them aware of any portable stock, such as laptops or mobile phones.

‘If you want to insure the building, your insurer will need to know the property’s rebuild value. Some insurers can offer up to £500,000 building cover which can include your home and/or your workshop or any outbuildings within the boundary of your property. Finally, they will want to know details of any loss, damage, injury or disability during the last three years in connection with the business you wish to insure.

‘Insurance companies can insure you for optional extra’s such as Terrorism Insurance, Insurance for Tools, business interruption insurance and many more. Obviously these will increase the cost of the annual premium so it is important that you do your homework and decide what is important to you and your business.

‘Working from home can at times be both a luxury and stressful but when it comes to home business insurance, you can never be too prepared. It is always best to insurer against the worst case scenario before it actually happens, that way you can concentrate solely on the growth of your business.’