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Working from home? Insured? Are you sure?

Discussion in 'Legal, Insurance & Issues' started by First4 Trades, Mar 2, 2011.

  1. First4 Trades

    First4 Trades

    Joined:
    May 20, 2010
    Messages:
    14
    Many of the members of this forum will be running your business from home, with all the benefits of not having to commute further than the stairs, flexible hours, and lunch breaks when you want them. Working on your own business from home is great, but some things are often overlooked or not thought of as being important. One of these is the issue of insurance. Your home is insured, as well as all the stuff in it. Those items you're selling on the internet will be covered under the contents section of your home insurance, right?
    Not neccessarily! Most home insurances will not cover business stock - which is what those items really are. In fact, most home insurance policies will only 'allow' an element of clerical working from home, which again won't cover your stock or for liabilities arising from anybody visiting you for business purposes.

    Anybody in the unfortuntate position of having to make a claim on their home insurance will know that, depending on the type of claim, the insurers will send out a loss adjuster. The loss adjuster will note the loss and so on, but will also make notes of anything else and report back to the insurance company. When your insurers find out that you are running a business from home that you haven't disclosed, they will not only refuse to pay your claim, but in all likelyhood make your entire home insurance null and void and cancel your policy entirely. Now imagine the loss is a fire or flood in your home, not just a theft, and you're beginning to see what a real nightmare this could become.

    The lesson is clear - always inform your home insurance company of EXACTLY what sort of business you are running from home including any stock. If they can't cover you, look around for a policy that covers running a business from home, such as Home Internet Traders. It simply isn't worth the risk of being uninsured - a little extra outlay now may well save you everything in the long run.
    JoyLinford, LiaS and T D Sales like this.
  2. Michael

    Michael

    Joined:
    May 6, 2009
    Messages:
    11,523
    Great info that many people simply overlook thinking 'it wont happen to me'

    People working from home (not just a home office) should also be enquiring about change of use planning permission that most local authorities insist on if you hold stock that is stored and distributed from a residential address. Then you have business rates on the part of the property that is to be used for business such as garages used for storage etc.
    JoyLinford likes this.
  3. AlwaysPresent

    AlwaysPresent

    Joined:
    Jan 14, 2011
    Messages:
    99
    Also if you are in Council or a Rented House, then it's most likely that the landlord/council won't let you trade from home :p
  4. Nasher

    Nasher

    Joined:
    Feb 3, 2011
    Messages:
    407
    Guys,

    Can I ask if any people starting up ebay businesses soley within their own home pay insurance,

    and exactly what your doing with it?

    Regards

    Nasher
  5. LazyBrit

    LazyBrit

    Joined:
    Jan 16, 2011
    Messages:
    1,079
    Anyone who trades fom home how much more does it cost on the insurance? as i dont pay it (live with parents) but i will have to pay the extra.

    Thanks

    Alex
  6. Nasher

    Nasher

    Joined:
    Feb 3, 2011
    Messages:
    407
    can you have a seperate home insurance and get someone else to cover your stock? i suppose you would need to be shifting quite a bit.

    id like to hear peoples stories/experiances......
  7. Michael

    Michael

    Joined:
    May 6, 2009
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    Yes but you will still need to tell your home insurer about the separate policy that covers business use.
  8. Simple Aquatics

    Simple Aquatics

    Joined:
    Apr 5, 2009
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    4,015
    ..................also tax implications if claiming certain parts of your home as business usage....................another thing to think on!
  9. seosunnyy

    seosunnyy

    Joined:
    Feb 25, 2011
    Messages:
    8
    These days working as a freelancer from home is also counted as the home business. And I think it does not required insurance but have home shop and have stock of items then insurance becomes very essential thing for business.
  10. First4 Trades

    First4 Trades

    Joined:
    May 20, 2010
    Messages:
    14
    In answer to your question Nasher - it's very unlikely that your home insurance will cover your business stock, and you wouldn't get away with classing it as 'contents' becasue it's in your home. To be safe, you really should tell your home insurers, even if it just means that they make a note on the home insurance policy specifically excluding your business stock.

    If you do something to earn money from your own home, even just 'clerical' (like a web designer), you should still tell your home insurance company. LazyBrit - you asked about the extra cost. This will vary due to lots of factors, such as your location, type of business use and the individual insurer, so it's difficult to say. Your best bet is to get your parents to contact their insurer to ask.

    You can get seperate insurance for home trading - do a web search for home internet traders or similar.
  11. yelenna

    yelenna

    Joined:
    Apr 2, 2011
    Messages:
    31
    What about if i was thinking about droppingshipping.even that the stock not at my house? would it still be a good ieda.
  12. Anthony

    Anthony

    Joined:
    Oct 17, 2004
    Messages:
    17,274
    Hi Michelle,

    If the stock is being held by your supplier (that would be dropshipping) then it would be their responsibility to have the stock insured and not yours. On the flip side, if you are holding even any amount of stock at your own home, the chances are your home insurance won't cover it in case of theft, damage, fire, flood, etc etc, and that's essentially the major point being referenced here - cover yourself & your stock, even if you are working within the confines of your own home.

    Hope this helps.
  13. yelenna

    yelenna

    Joined:
    Apr 2, 2011
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    31
    A big help thank you
  14. fd.ltd.uk

    fd.ltd.uk

    Joined:
    Dec 6, 2009
    Messages:
    256
    Apart from stock considerations , are people visiting your home for any business reason ? What if they trip up on your doorstep ?
  15. paulbrown

    paulbrown

    Joined:
    Jul 8, 2010
    Messages:
    417
    Anyone found anyone who will insure them? Company web address's please...
    Im struggling to find a quote for under £1000 a year based on £50k worth of stock.
    And hardly any insurance company wants to touch it!

    Anyone know roughly whats a good deal for this amount of stock?

    Also thinking of moving to a warehouse soon insuring £200k worth of stock, how much could I expect to pay for that?

    Thanks
  16. Michael

    Michael

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  17. rafwraf

    rafwraf

    Joined:
    Apr 4, 2011
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    Other things to consider.Have you got a Business Bank Account. Most Banks don't like you using a Personal Account for business. Because on a business account they usually charge you a Monthly Fee. Though I went with lloydsTSB who give me the first 18 months free.

    Another thing what about Business Broadband. Where the costs are Higher have we all got that...........The simple answer is NO.
  18. paulbrown

    paulbrown

    Joined:
    Jul 8, 2010
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    417
    I didnt even consider business broadband!!

    I am half way there though got the business bank account and 24 months free banking big up Natwest!! :thumbup:
  19. rafwraf

    rafwraf

    Joined:
    Apr 4, 2011
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    Oh! didn't know about NatWest, though wouldn't go there anyway as we fell out with them some 21 years agoIVowed I would never go in one of their Branches as lomg as I lived, Anyway I'm happy witjh 18 Months free Banking by that time I shall be making so much money i won't worry about the Bank Charge. Ha Ha Ha Ha Ha
  20. rafwraf

    rafwraf

    Joined:
    Apr 4, 2011
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    Must confess I haven't got Business Broadband.......Anyone know who is the best ?
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