Home workers - have you taken out business insurance?

New research suggests that many of the UK's two million home workers are unknowingly putting themselves at financial risk by wrongly believing that their businesses are covered by existing home contents insurance policies.

The findings, released by online insurance provider Insurantz, revealed that a staggering 45% of the UK's estimated 2.1 million home workers have no business insurance cover at all - risking a loss of livelihood, fines or even legal proceedings if things go wrong.

With the economic downturn now firmly upon us, many experts believe that the number of home businesses will soar beyond the current 1400 new launches each week. It is estimated that there could be as many as 180,000 eBay businesses out there - using the web as their main, or secondary income source.

Those working from home are least likely to have adequate business insurance

The survey showed that home workers are the least likely out of any business group to have adequate insurance cover, many believing their companies are already covered by standard home insurance policies. However, a home insurer may well have the right to turn down claims for losses when a business has been run from home (without the correct cover).

Additionally, many online traders may also be unaware of their obligation to protect customers under legislation such as the sale of goods act. A significant number fail to take out product liability insurance, which could safeguard them from legal action or loss of revenue in the event a customer is injured or their property damaged.

MD of Insurantz, James Pickering, said: “In the current economic climate setting up a home business can offer individuals or families a great way to supplement their income and cope with rising costs, but it’s dangerous to think that the process is simply a matter of getting a laptop and an internet connection. The reality is that, from an insurance perspective at least, home business owners face exactly the same risks as any other businesses.”