Running small business from home - home insurance? Business insurance? Both?

shewdz

Hi!

I started a small 3d printing Etsy business which has some what taken off. I have registered the company as a sole trader.

My home insurance is up for renewal and I'm not sure what I need.

Obviously I will get home insurance, but does this need to cover the business too? Or do I get standard home insurance and get small business/craft insurance as well?

My theoretical situation would be that the 3d printer burns the house down. What cover do I need?

Thanks!

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6652938/running-small-business-from-home-home-insurance-business-insurance-both

You've registered the business, if you've registered a company then you arent a sole trader.

Your home insurance will need to know that you are running a business from home that includes holding materials, equipment and manufacturing. Most insurers are going to turn you down, they're comfortable with clerical but not this type of thing. I would warn about not declaring it, a former client turned down a £400k claim because they found the insured had been using their spare bedroom to keep stock for their hairdressing salon which hadn't been declared.

Some insurers will cover up to £X of business equipment, generally thats more considered for home workers (ie desk, laptop etc), probably 50/50 how they may view a 3D printer or the materials it uses but that would be from the considerations of damage done to the printer rather than the damage the printer does to the rest of the home.

Business insurance will be a consideration but really depends on what risks you want to cover for. Someone being injured by your products? Then you definitely need product liability cover, at the SME level that will be embedded in Public Liability cover.

There is a whole host of other insurances you can consider from Cyber to Business Interuption to Professional Indemnity depending on the exact nature of the services/products you are offering or the risks you are concerned about.

shewdz

https://forums.moneysavingexpert.com/discussion/comment/81862111#Comment_81862111

Ah ok, thanks @MyRealNameToo

It seems like I'm going down the right lines. I have found a few broker that will cover business to the extent I need them, at a premium.

+ Sorry, poor use of terminology. I have set the business up as a sole trader.

From an expenses/deducatables point of view? Would the home business insurance become fully deducatables? Even though I would need home insurance anyway? Or could I just claim for the difference between a quote for standard home insurance, and the price I pay for the home business insurance

As for true business insurance, the items are home decore items, so minimal risk, though I may still get it for the sake of less then £100 for the year.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81862309#Comment_81862309

Just remember that a sole trader you are fully liable personally, so in the unlikely event that someone decided to use one of your home decor items as a light shade and it caught fire, burnt down their home etc your personal assets are at risk if they can substantiate you were negligent.

There are some "home business" policies, that are a true blend of business insurance and home. Some insurers may be willing to take you on with a standard home policy but it's going to be much less than clerical work would have been if you declare it.

I am not a tax expert but generally for things that have personal and business use you can claim the proportion that relates to the business as an allowable expense. Ideally the broker can say that the home aspect is £X and the business equipment cover is £Y so you have clean numbers. I suspect the home component will be uplifted because of the business element even if the equipment itself is insured elsewhere (mainly because there is less competition as fewer people write this) and I dont know if you could legitimately say that as its a result of the business its a business expense.

Looking at it another way, a taxi driver insuring their personal car will pay more than say a GP, whilst they can claim the insurance on their taxi as an expense I doubt they can claim the uplift on their personal car.