Direct Line, one of the UK’s largest insurers, has found that many small home based businesses are putting their business at risk by not taking out the correct business insurance. By not having the correct business insurance, you could find yourself loosing money if your business is unable to trade for a certain amount of time.
Direct Line have found that almost 30% of UK based home business don’t have any insurance for their business. Out of the 75% odd businesses that do have insurance, only a small 12% actually have the correct insurance for their home business.
The amount of home based businesses that take out public liability insurance isn’t a great deal better than those taking out business insurance. Only 32% of businesses actually have public liability insurance, which means that over 65% of home based businesses are not protected against claims made against their business.
The reason why so many home grown businesses aren’t buying the correct insurance is because they believe it’s covered by their standard home insurance. When it comes to setting up a home business, the majority of people forget about getting office insurance when your entire company is run from the inside of your house, which is all insured. However, many business owners will be shocked when they are turned away by their home insurer when they try to make a business claim. The majority of people see setting up a home business as a quick and cheap solution, however, if they were setting up something like a salon, they would always think of getting salon insurance, but when you go to setup your own home based business, getting insurance can slip your mind.
Direct Line recommends that if your home business isn’t yet insured, you take out the appropriate insurance as soon as possible. That way, you are correctly covered in the event of a business based claim.
Kate Syred, head of Direct Line Business, said this about the research findings. “With so few businesses being protected from a liability claim, or an unexpected pause in trading, this research highlights the need for business owners to think about specific business insurance. Without it, dreams of being a business owner could quickly become a nightmare.”