Businesses that operate from home still face risks and need the right protection.
Working from home seems the ideal step towards that perfect work-life balance. But get the right insurance or you could lose more than just your job.
More than 4.2 million people now work from home in the UK. That is around 14% of the British workforce. This figure has increased by 25% since 2005, and the trend is almost certain to continue at a similar rate over the coming years.
As more and more of our work and indeed our day to day life is conducted online, the need to be around others in a particular location in order to do a day’s work becomes less. The home-office is seen by many as an ideal choice for a flexible lifestyle. The traditional 9-5 can be forgotten as work and family commitments seamlessly fit around each other.
It is easy to overlook the potential risks faced by home workers, particularly sole traders or those running their own small businesses. Those who do not take out public liability insurance put not only their livelihoods but possibly their homes and assets at risk in the event of a catastrophic incident.
Here we examine this and other types of insurance that the home-working business person should consider:
Public Liability Insurance
While not a legal requirement, public liability insurance is really an essential for every business. It provides protection in the event that either your clients or members of the public suffer injury or property damage because of your business. Whatever type of business you run, accidents can happen. In particular, consider the consequences of a client having an accident while visiting your home for a business meeting.
Employers’ Liability Insurance
If you employ anybody else in your business, then employers’ liability insurance is a legal requirement under the Employers’ Liability Insurance Act of 1969. This type of policy provides cover in the event that an employee suffers illness or injury as a result of their work.
Professional Indemnity Insurance
As human beings, we all make mistakes from time to time. If you run a business where a client relies on your actions or advice, then such mistakes can prove costly and can lead to lawsuits and legal costs. This is where professional indemnity insurance comes in. Also known as errors and omissions insurance, the cover focuses on any failure to perform your job, or losses sustained by a client through negligence or some other error or omission on your part.
Business Contents Cover
You will have valuable business items, such as IT equipment, that will not be automatically covered by your home contents insurance policy. Your home policy could possibly be amended, but it is likely to be more cost effective to take out a business contents policy.
Electronic Data Loss Insurance
For today’s businesses, their virtual data is even more critical than their physical assets. Cyber policies protect against lost or damaged data. They can also provide cover against the business interruption that can be caused by a serious data loss event. Such interruption can end up being more costly to the business than the event itself.
Directors and Officers Insurance
If your company has directors or key managers, you should seriously consider directors’ and officers’ liability insurance.
Directors and officers have specific duties, responsibilities and powers relating to their positions. If they fail to fulfil these duties and responsibilities, they can face civil, criminal or regulatory proceedings.
Directors’ and officers’ insurance covers the cost of defending these proceedings, as well as any compensation costs that arise. Without such insurance, there is a greater risk of directors not being able to defend themselves against disqualification, civil proceedings and even criminal prosecution.
Working from home is something that many dream about, but that more people every year can make a reality. Most never look back – just make sure you have the right insurance protection in place so that the dream does not become a nightmare.