Working from home? Insured? Are you sure?

Many of the members of this forum will be running your business from home, with all the benefits of not having to commute further than the stairs, flexible hours, and lunch breaks when you want them. Working on your own business from home is great, but some things are often overlooked or not thought of as being important. One of these is the issue of insurance. Your home is insured, as well as all the stuff in it. Those items you're selling on the internet will be covered under the contents section of your home insurance, right?
Not neccessarily! Most home insurances will not cover business stock - which is what those items really are. In fact, most home insurance policies will only 'allow' an element of clerical working from home, which again won't cover your stock or for liabilities arising from anybody visiting you for business purposes.

Anybody in the unfortuntate position of having to make a claim on their home insurance will know that, depending on the type of claim, the insurers will send out a loss adjuster. The loss adjuster will note the loss and so on, but will also make notes of anything else and report back to the insurance company. When your insurers find out that you are running a business from home that you haven't disclosed, they will not only refuse to pay your claim, but in all likelyhood make your entire home insurance null and void and cancel your policy entirely. Now imagine the loss is a fire or flood in your home, not just a theft, and you're beginning to see what a real nightmare this could become.

The lesson is clear - always inform your home insurance company of EXACTLY what sort of business you are running from home including any stock. If they can't cover you, look around for a policy that covers running a business from home, such as Home Internet Traders. It simply isn't worth the risk of being uninsured - a little extra outlay now may well save you everything in the long run.
 
May 6, 2009
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Great info that many people simply overlook thinking 'it wont happen to me'

People working from home (not just a home office) should also be enquiring about change of use planning permission that most local authorities insist on if you hold stock that is stored and distributed from a residential address. Then you have business rates on the part of the property that is to be used for business such as garages used for storage etc.
 
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Also if you are in Council or a Rented House, then it's most likely that the landlord/council won't let you trade from home :p
 
Feb 3, 2011
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can you have a seperate home insurance and get someone else to cover your stock? i suppose you would need to be shifting quite a bit.

id like to hear peoples stories/experiances......
 
These days working as a freelancer from home is also counted as the home business. And I think it does not required insurance but have home shop and have stock of items then insurance becomes very essential thing for business.
 
In answer to your question Nasher - it's very unlikely that your home insurance will cover your business stock, and you wouldn't get away with classing it as 'contents' becasue it's in your home. To be safe, you really should tell your home insurers, even if it just means that they make a note on the home insurance policy specifically excluding your business stock.

If you do something to earn money from your own home, even just 'clerical' (like a web designer), you should still tell your home insurance company. LazyBrit - you asked about the extra cost. This will vary due to lots of factors, such as your location, type of business use and the individual insurer, so it's difficult to say. Your best bet is to get your parents to contact their insurer to ask.

You can get seperate insurance for home trading - do a web search for home internet traders or similar.
 
Oct 17, 2004
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What about if i was thinking about droppingshipping.even that the stock not at my house? would it still be a good ieda.
Hi Michelle,

If the stock is being held by your supplier (that would be dropshipping) then it would be their responsibility to have the stock insured and not yours. On the flip side, if you are holding even any amount of stock at your own home, the chances are your home insurance won't cover it in case of theft, damage, fire, flood, etc etc, and that's essentially the major point being referenced here - cover yourself & your stock, even if you are working within the confines of your own home.

Hope this helps.
 
Jul 8, 2010
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Anyone found anyone who will insure them? Company web address's please...
Im struggling to find a quote for under £1000 a year based on £50k worth of stock.
And hardly any insurance company wants to touch it!

Anyone know roughly whats a good deal for this amount of stock?

Also thinking of moving to a warehouse soon insuring £200k worth of stock, how much could I expect to pay for that?

Thanks
 
Other things to consider.Have you got a Business Bank Account. Most Banks don't like you using a Personal Account for business. Because on a business account they usually charge you a Monthly Fee. Though I went with lloydsTSB who give me the first 18 months free.

Another thing what about Business Broadband. Where the costs are Higher have we all got that...........The simple answer is NO.
 
Jul 8, 2010
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I didnt even consider business broadband!!

I am half way there though got the business bank account and 24 months free banking big up Natwest!! :thumbup:
 
Oh! didn't know about NatWest, though wouldn't go there anyway as we fell out with them some 21 years agoIVowed I would never go in one of their Branches as lomg as I lived, Anyway I'm happy witjh 18 Months free Banking by that time I shall be making so much money i won't worry about the Bank Charge. Ha Ha Ha Ha Ha