Millions of home workers are breaking the law because they fail to take out proper insurance cover. An estimated 5.4 million people work from home and half have inadequate insurance or no cover at all.
The number of people working from home has increased by 20% in the past decade, and it’s a trend that looks set to continue. It’s not clear exactly why so many home workers aren’t adequately insured, but it’s likely to be due to a number of factors from simple misunderstanding to deliberate avoidance.
Research suggests that while 850,000 home-based entrepreneurs employ at least one person; only 150,000 have employer’s liability insurance. And because employer’s liability insurance is a legal requirement, it means that an awful lot of people are breaking the law.
The report goes on to reveal that while two-thirds of home workers use their cars for business; only 14% have specified business cover. Most providers will add ‘business use’ to a domestic car insurance policy for a small amount, but if you aren’t covered (and are stopped by the police) you will be issued a steep fine and a fixed number of penalty points.
It’s a similar story with home contents insurance, where you could invalidate your policy if you don’t tell your provider that you are working from home. If you are in any doubt get in-touch with your home insurance provider and ask if you can change your policy to cover business equipment and stock.
While some insurance shortfalls can be overcome by ‘upgrading’ existing home and car policies, there are a number of very real exposures which would be best covered with a tailored home worker policy.
Public liability insurance is the most obvious example and it’s certainly worth asking your broker about professional indemnity insurance and legal expenses cover. To find out more about home worker insurance Tel: 0844 888 0881 or visit our small business insurance pages.
For entrepreneurs it’s comforting to know that some of the world’s biggest businesses began life at home. And if the garage is good enough for the likes of Google and Apple, then it’s good enough for most, just make sure that you are adequately insured.
*Research data comes from AXA