‘Homepreneurs’ putting businesses at risk without insurance

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Thousands of home-based businesses are at risk of significant losses due to inadequate protection, a study has found.

As many as 145,000 “homepreneurs” do not have business insurance as they believe ventures are covered by a home contents policy.

The research, carried out by Direct Line for Business and Enterprise Nation, also found two in five home-based traders have no cover at all.

While home insurance may protect office equipment, business owners might be exposing themselves to a number of other losses.

Home businesses, which are an estimated £300bn industry, could be exposing themselves to financial risk through public liability or loss of earners due to uninsurable events such as fire and flood.

Almost a third (29 per cent) of those surveyed said they did not need business insurance as they are “not big enough”.

One in seven (14 per cent) of home-based businesses have clients visiting on their property. Without proper public liability coverage, any injury or damage sustained in the home could lead to legal and financial obligations that bankrupt a business, the insurer said.

Beatriz Garcia-Martinez, who runs relocation consultancy SecurelyBe from home, said insurance can be difficult to navigate for start-ups.

She said: “Depending on your type of business and sector it can require extensive research in to the legalities of business.

“This is difficult task for small operation to undertake because it can take lots of time and often certain expertise that home businesses may lack.

“Small business owners need insurers to partner with them from the beginning, to help us understand the essentials we need now and might need in the future.”

Jazz Gakhal, head of Direct Line for Business, said home business insurance can be purchased alongside home insurance.

“Home businesses are booming at the moment,” he said.

“With that in mind it’s worrying to see that a significant proportion of them have not taken insurance to protect their assets.”