Home based insurance abandoned
Maybe it is due to the financial downturn and budgeting issues, or maybe it is just down to laziness, but research from an insurance company has revealed a shocking discovery.
Home-based businesses are taking redundant hazards by not taking out adequate commercial insurance cover or public liability insurance, according to the group.
A study by the firm, found that 28% of home-based businesses have no form of business insurance at all, with just 12% having enough protection if their business was temporarily unable to trade.
Furthermore, only 32% of at-home companies have taken out public liability insurance, and just 11% have product liability insurance, putting themselves on the firing line from compensation claims made against them.
As a result, the majority of business owners based at home who have not taken out business insurance are leaving themselves vulnerable to being unable to cover the cost of a crisis, the insurer warned.
Kate Syred, head of the insurance firm, state: “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.”
As a result, the firm offered a stark warning to those who have not yet purchased public liability insurance. The group pointed out that many of those who run a business from their home think that home insurance will protect them if they need to make a claim for their business. However, they could not be more wrong.
Because even if this was the case and home insurance could double up as business insurance, only 32% of home-based business owners have office contents insurance, and 18% are covered for loss of things like tools, mobile phones, and other equipment.
Ms Syred furthered that company owners who rely on their home insurance may be in for a nasty surprise when making a claim:
“Many people set up a business from home because it's a cost effective solution. However, you still need insurance for protection in the event of something going wrong. A standard home insurance policy may have limited, if any, cover and many businesses relying on this could find it difficult when it comes to making a claim,” she said.
Education to help businesses
In a further attempt to persuade business owners to purchase public liability insurance, the Environmental Health Department has launched an event to highlight insurance issues.
The scheme runs for half a day, and focuses on workshops for local firms that are keen to find out more on how to ensure safety issues in their workplace.
Barry Doherty, the Council's senior environmental health officer, said that public liability insurance customers attending the workshop will get to discuss any issues with environmental health officers.
“The workshop will, among other things, look at a number of typical workplace scenarios and delegates will be asked to identify health and safety hazards and discuss the measures that can be taken to eliminate or minimise any associated risks,” he said.
Updated on 10/22/2009