Public liability insurance for home businesses

In case your home business and products cause injuries or property damage.

What’s typically covered by public liability insurance?

Claims against your business for:

• damage to someone’s property, because of your home-based business
• an injury or illness caused by your business activities or products
• accidental damage or injuries caused by your employees

For example:

• your dog chews through a client’s shoe while they’re in an appointment with you
• one of your products causes food poisoning in three families who buy from you

If you do employ anyone, you’re usually required by law to have employers’ liability insurance too.

Read more about public liability insurance

Employers’ liability insurance

In case anyone gets ill or injured while working for your home business.

What’s typically covered by employers’ liability insurance?

Claims against your business for:

• an injury or illness that happens as a result of working for you (including temps and casual workers)

**Employers’ liability insurance is required by law if you have people working for you. Without it, you could be fined up to £2,500 a day for each employee.**

For example:

• you’re running a baking business and your employee slips on your kitchen floor, injuring her lower back
• a trainee you’ve hired catches his hand in a broken window frame in your home, and needs hospital treatment

Professional indemnity insurance for home businesses

In case there’s a claim for loss-causing errors or issues with your work.

What’s typically covered by professional indemnity insurance?

Claims against your home business for professional negligence or a loss-causing breach of contract. This can include:

• advice which turns out to be incorrect
• mistakes in your work that cost others money to fix

For example:

• a client claims you’ve made a mistake, causing them to delay a deadline and incur losses
• your employee sends an email containing sensitive data attachments to the wrong client, and you receive a claim for compensation

Read more about professional indemnity insurance

Tools insurance

In case something happens to your home business kit.

What’s typically covered by tools insurance?

• the specialist tools you use for work, like handheld or portable electronic equipment
• loss, damage, or theft

For example:

• one of your children drops a set of tools you use for your home-based upholstery business, and you need to repair or replace them
• you’re running an ironing and laundry service from home, and your kit gets damaged in a flood in your utility space

Read more about tools insurance

Stock insurance

In case something happens to the products and materials you rely on.

What’s typically covered by stock insurance?

• loss, damage, or theft of essential stock items, like ingredients or spare parts

For example:

• the stock of beauty and hair treatment products you use to run your home business are stolen from your garage
• a fire destroys the stock of wool, silk, and other materials you use to operate your home alterations business

Read more about stock insurance

Legal expenses insurance

In case you face legal costs in connection with your home business.

What’s typically covered by legal expenses insurance?

• legal costs attributed to your home business
• property damage, nuisance, or trespass – specifically, the associated legal claims and compensation payouts
• tax and compliance disputes and investigations you need help with
• access to expert advice – including a tax advice phone line, confidential 24/7 legal phone line, and crisis support to help you protect your professional reputation

For example:

• a neighbour raises a nuisance claim against your home business, and you need to pay for legal advice
• you need to recover legal costs after an employee sues you for unfair dismissal

Read more about legal expenses insurance

Personal accident insurance

In case anyone you’ve covered is accidentally injured, at work or elsewhere.

What’s typically covered by personal accident insurance?

• accidental injury or death at or outside of work, for anyone covered on the policy
• lost income, medical costs, and hospitalisation benefit

For example:

• you suffer a head injury while on holiday and require three weeks off work for recovery
• one of your employees, who you’ve covered on the policy, traps their hand in your home office door, requiring emergency surgery and four weeks off work

Read more about personal accident insurance

Can I just cover my most expensive tools?

Make sure you cover the total cost of replacing all your tools or you’ll only get a proportion of your claim paid out if something happens to them. Learn about tool cover.

Which type of workers do I need insurance for?

Employers’ liability insurance is a legal requirement if you employ people.

If you have people working for you, including bona fide subcontractors (BFSC), labour-only subcontractors (LOSC), part-timers, or full-time staff, employers’ liability insurance is required by law.

Read on for our simplified guide to the difference between labour-only subcontractors and bona fide subcontractors.

Will tools insurance cover all my equipment?

Depending on what you use to do your work, you may need other covers.

You may need more than tools insurance – for example, business equipment insurance if you have a work laptop, plant insurance if you use machinery.

Does home business insurance cover my work correctly?

Make sure you’re picking the right cover to protect you properly. It’s important to know that if you have another trade or job, you’ll need additional cover. For example, do you need to consider home baking insurance or online retailer insurance?

Do I need cover for other types of work?

If you provide other services, make sure you’re covered:

• Journalist insurance
• Bookkeeping insurance
• Finance and legal
• Web designer insurance
• Carpenter insurance
• Translator insurance
• Beauty insurance
• Massage insurance

Other types of insurance

• Limited company insurance
• Self-employed insurance
• Freelance insurance
• Consultant insurance
• Contractors insurance
• Sole trader insurance

Which public liability cover limit should I choose?

Think about the maximum possible loss your business could face in the event of a claim, and make sure you take legal fees and damages into consideration. You can choose from three levels of coverage – £1 million, £2 million, or up to £5 million.