Finding the right insurance for a home-based business

More people are setting up business from home to keep costs down as the job market changes after the recession.

Fewer jobs and more unemployed and students who can’t find jobs, many are turning their skills and qualifications in to self-employment.

Working from home saves start-up businesses money – but it’s wise not to scrimp on business insurance.

If you are a sole trader or partner, if any claim is made against the business, a court can make an award based on all your financial assets – including your home.

This means even the cheapest business insurance cover becomes a worthwhile cost.

The minimum business cover is public liability insurance that pays out if anyone suffers injury, illness, or damage to property because of dealing with you.

This covers business visitors to your home who might slip up on wet leaves on your path or you spilling your coffee on a client’s laptop.

As soon as your business expands and you take on staff, look at employer’s liability insurance. Employer’s liability cover is a legal requirement for any business that has staff – even if they are unpaid volunteers.

Employer’s liability insurance pays legal fees and compensation if anyone working for you has a claim mainly related to health and safety.

Many business insurers offer a package that includes comprehensive public and employer’s liability cover.

Professional advisers, like accountants, solicitors, consultants, and engineers often need professional indemnity (PI) cover, sometimes called contractor liability, as part of the membership of a regulatory body. Professional indemnity deals with complaints or disputes with clients over alleged negligence.

Another less common business insurance that is worth investigating for some traders is business interruption insurance.

Gebnerally, business interuption insurance is for traders who make goods or carry stock who miss orders due to problems like flood or fire.

Small businesses often forget insurance costs are an allowable business expense for tax purposes that can be included in accounts.

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