Insurance for home workers

The complete guide to insurance for home workers – in plain English

Having the right insurance is one of the most effective ways to protect your small business.

But you already know that.

The tricky bit is finding out what the right insurance for home workers is.

So I’m delighted to be working with specialist business insurance broker PolicyBee

to bring you a series of sponsored posts offering straightforward information about insurance for home workers.

Their name kept cropping up – in a good way – whenever the subject was mentioned by home business owners.

Narrowing down the right insurance for home workers is difficult because, sometimes, working from the comfort of your kitchen can make you feel a bit removed from risk.
The important thing to remember is that every business faces some risk, regardless of its size and situation.
So, rather than a scary reality check, the guide to professional insurance in this sponsored post will tell you what sort of cover there is, what it protects you from, and why you might want to consider getting it.

Professional indemnity insurance

What is it?
Broadly, this is insurance for anyone who offers specialist advice or services to paying clients.
If you make a mistake in your work that leaves your client out of pocket, they can (and probably will) accuse you of professional negligence.
Professional indemnity (PI) insurance pays a specialist solicitor to defend you from these allegations. And if you are at fault, your policy covers the cost of any damages and compensation you have to pay.

What does it protect me against?
PI insurance can protect against a wide variety of mishaps. These include breach of contract, breach of intellectual property rights, loss of documents, employee dishonesty, virus transmission, defamation, and breach of confidentiality.
For example, your client might demand you pay to reprint their 500 typo-infested brochures you designed. Or it could be that you lose your client’s work, delaying a project or, worse, leaving them with nothing.

Why do I need it?
Since PI covers what you do, where you do it is irrelevant. Working from home doesn’t mean you’re immune from clients’ finger pointing. If anything, your comparative small size means you need more protection, not less.
Plus, it saves you money (aside from buying it, of course). Without it, if accusations are flying around, you’ll have to pay for compensation and legal fees yourself. Whether you’re at fault or not.
It also helps protect your reputation. If you really mess up, PI insurance means you can put it right – without jeopardising your client relationships.

Public liability insurance

What is it?
Public liability (PL) insurance protects your business if a third party claims you’ve damaged property or people.

What does it protect me against?
As with PI insurance, it pays compensation and legal fees if you’re accused of negligence. Only this time it’s for physical rather than financial damages. Things like clients tripping over and injuring themselves on your wobbly front step, or you knocking a cup of tea over their laptop when you go visit them.

Why do I need it?
You’ve heard of ‘where there’s blame there’s a claim’, right?
Successful bodily injury claims often result in hefty compensation payments. PL insurance covers that cost.
If you have visitors to your home, PL insurance could be important. Unlike business premises, houses don’t always meet the same high health and safety standards. That means there could be more potential hazards, like loose paving slabs and wonky steps, waiting to cause trips and falls.
It’s worthwhile checking to see if your home insurance covers PL claims if they’re related to commercial activity. It’s possible it doesn’t.

Office insurance

What is it?
Fairly simply, office insurance covers your property from loss, theft, or damage. This includes things like furniture and office supplies, as well as computer and other technical kit.

What does it protect me against?
Office insurance covers a wide range of problem-causing scenarios. That includes having your stuff stolen, damaged by fire and flood, dropping it down the stairs – even leaving it on the bus (if you take a laptop out and about, for example).

Why do I need it?
Chances are you bought most of your work kit yourself. Having to replace all of it in one go could take a serious chunk out your company’s budget. Add it all up – right down to the last paperclip – and it’s probably more than you thought.
Be aware that not all home insurance policies cover office equipment. You should check whether your home insurance covers working from home. Some policies exclude it completely, while others might just cover occasional work, not full-time home working.

Employers’ liability insurance

What is it?
Employers’ liability (EL) insurance protects you if your employees suffer an illness or injury at work and you’re to blame. It can provide legal fees as well as compensation.

What does it protect me against?
This covers you if your actions result in an employee suffering an injury. For example, you may have failed to provide the correct training, causing an employee to injure themselves. Or it could simply be that you didn’t fix that wobbly step your employees had warned you about.

Why do I need it?
Unlike other types of insurance, EL is a legal requirement. That’s the case for every UK business with employees.
You might be thinking that doesn’t apply to you. Be wary though, because the HSE’s definition of ‘employee’ stretches to volunteers, part-timers, temps, apprentices, secondees, students, and work experience kids. In short, anyone who helps you run your business – paid or not; permanent or not.
If you don’t have EL when you should, you could face a £2,500 fine from the HSE for each day you don’t have the correct cover. That’s as well as a £1,000 fine for not displaying the certificate proving you have it.
The minimum level of cover required by law is £5m. You’ll find most insurers only offer £10m.

Safe as houses?
Working from home has its advantages.
The thing to remember is that you’re still working. You’re still a business. And because you are, you have the same responsibilities and face the same risks as any other business (to a greater or lesser extent).
That doesn’t mean making fundamental changes; it just means keeping an eye on the serious stuff every now and then.

PolicyBee is a specialist professional indemnity and business insurance broker born in CEO Iain’s shed because he was so frustrated at how confusing and difficult it was to get business insurance. Policybee is independent, digital, and understand the problems a young, modern business has because it is one. Although it’s no longer run from the shed.

Do you have any questions about insuring your business? Let us know in the comments and PolicyBee will answer them in future posts.

Click here for more posts about home working insurance.