January 21, 2013
As the number of people who work from home continues to rise, statistics from AXA Business Insurance suggest that the majority of the 5.4million
homeworkers in the UK are, probably unknowingly, operating without the insurance cover they need and over half are potentially breaking the law in the process.
According to research from AXA, 16% (over 850,000) of homeworkers employ one or more people yet only 3% (around 150,000) have
employer's liability insurance
. Meanwhile just 14% (approx 750,000) of homeworkers surveyed say they have business car insurance yet 66% (over three and a half million) use their cars for business purposes
. In both instances this would mean they are operating illegally.
And aside from the legal requirements of insuring yourself if you work at home, AXA is also warning people to be aware that they should inform their home contents provider if they are working from home or they could risk invalidating their policy.
For the 10% of homeworkers who meet clients in their home, or the 30% who visit clients' premises, AXA advises that public liability insurance should be considered to protect against any accidents. Meanwhile, only 8% have
professional indemnity insurance
to cover themselves for legal liability in the event of providing customers with poor advice.
One in four homeworkers admitted they were putting their businesses at risk through neglecting their insurance needs as they would not know how to fund any shortcomings if they needed to make a claim and had insufficient cover.
, Managing Director of AXA Business Insurance, said: "The number of people working from home has grown by over 20%
in the last ten years or so but our research shows that these people take a more relaxed view on insurance than those working from business premises. We appreciate that generally there is no intention to break the law and that insurance is possibly not top of the priority list for many people. However, it is absolutely vital that homeworkers check what they need to be covered for and, at the very least, meet legal requirements. We would also strongly recommend that people consider what other cover they need to protect what is, in many cases, their livelihoods."
Insurances to consider for a home-based business: