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Home workers at risk without business insurance

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Nearly one million home workers are putting themselves at risk by wrongly believing their businesses are covered by home-contents insurance.

Nearly half (45%) of Britain's 2.1 million home workers don't get any business insurance at all, leaving themselves susceptible to heavy fines, crippling legal fees and the loss of their livelihood, according to research by Insurantz.com.

The business insurance website found that home workers are the least likely of any sector to have insurance.

Many home-business owners wrongly believe that their home-contents policies provides the cover they need

Many home-business owners wrongly believe that their home-contents policies provides the cover they need, when in reality most home insurance policies exclude any business activity run from home.

With many eBay entrepreneurs using equipment and keeping stock in a spare room at home, losses can quickly become crippling if disaster strikes. A home insurer may even have the right to turn down a significant claim for instances such as theft, damage or arson because of the home owner is running a business from home.

James Pickering, managing director of Insurantz.com, warns entrepreneurs keen to work from home against complacency.

"In the current economic climate, setting up a home business can offer individuals or families a great way to supplement their income and cope with rising costs, but it's dangerous to think that the process is simply a matter of getting a laptop and an internet connection.

"The reality is that, from an insurance perspective at least, home business owners face exactly the same risks as any other businesses."

Confusion

Insurantz.com also believes many online traders are unaware of their obligation to protect customers under legislation such as the sale of goods act. A significant proportion fail to take out product liability insurance, which could safeguard them from legal action or loss of revenue in the event a customer is injured or their property damaged.

"There's definitely a good deal of confusion surrounding the responsibility that business owners have to deliver goods that are both fit for purpose and of satisfactory quality.

"Ultimately the buck could stop with the seller, so businesses trading on eBay need protection to prevent financial penalties and even legal action if the goods they are selling turn out to be faulty, or worse, dangerous."

Nearly 1,400 home businesses are launched every week and contraction in the rest of the economy is actually expected to spark further growth in the sector.

Sites like eBay have spawned a generation of more than 180,000 internet home businesses in the UK that use the internet either as a primary or secondary source of income.


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