Insurers who don’t mean business for small traders

Self-employed traders running a business from home may find that they are jeopardising their insurance even if they work part-time for little return.

Landlords and eBay traders probably do not consider their activities a business but will find insurance companies invalidating their cover if they make a claim.

The Residential Landlords Association (RLA) has warned that landlords making insurance claims for incidents that occur on property visits or who drive to collect rents do not have cover unless they have business use specified on the policy.

Standard car insurance cover excludes driving a car for business, says the RLA, so if the landlord has an accident or valuables are stolen from a car, the insurer may not pay out.

The RLA cites More Than as one insurer excluding rent collection from normal cover.

“It is possible that landlords who use cars covered by normal insurance for social, domestic and leisure use, to collect rents and visit their rental properties, may not be covered if they have an accident while ‘on business’,” said a RLA spokesman 

“If landlords have any doubts about their home or car insurance, they should check with their provider or broker.”

Home as office insurance is another problem for landlords and eBay traders.

Most home insurance does not cover the business use of computer or office equipment, so if thieves steal a business computer or one is accidentally damaged, the cost can be excluded from a claim.

The same rule covers stock stored at home or in a garage.

To make sure they are properly covered, small businesses working from home should check out the terms of cover and consider some important action;

  • Upgrading car insurance to include business – this should not affect the cost of a policy
  • Changing home insurance to include home as office cover for computers, mobile phones and cameras used for business even if they have private use as well
  • If customers visit a home-based business, take out public liability cover

Small business insurance can be claimed as a costs in tax returns. The cost of computers, software, peripherals, consumables and other gadgets can also be claimed as business expenses.

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