It’s very important to understand that your household costs are not part of your home business. Unfortunately you will not get any existing household costs past the IRS man. This means that any costs you would have had without your office being on your premises will just not fly. Think of your business as being stand-alone from your property regardless of where it is so phone line and internet rental, mortgage, council tax etc. are all attached to your property regardless of where you work.
Once you understand this you can work out the share for the bills used by your business use such as the proportion of electricity and gas for heating and lighting. If you have a dedicated phone line and internet connection this is tax deductible.
This can all be quite confusing to us but your accountant can make clear exactly where you stand and where the line is between your home and your office. Just like with your business insurance, it’s important you empower yourself with this knowledge to stay protected.
If you work from home but for an employer (rather than running your own business) there claims you can make depending on the reasons and the time you spend there. This article can tell you more.
Just because you are working from home it’s vital you don’t assume everything is covered on your standard Home Insurance. In fact this dual purpose use of your property can leave you underinsured or even void your insurance! How your insurance is affected will obviously depend greatly on the size and type of your business so we’ve listed a few of the main points to consider. Do some research and remember it’s generally a fairly simple process, speak with an advisor to discuss your home business insurance options.
Business insurance vs Home Insurance –
When you have business insurance you pay to protect your stock, your employees, income and the public but what about the home you already live in and work from? This is covered by your home insurance right? Well if you are using the property for a commercial purpose then this could invalidate your current policy. Make sure you contact your home insurer and discuss how working from home affects your current protection.
“82% of home business owners believe technology has been a very important factor allowing them to start and grow the business from home and 52% spend between £500 – £1000 on IT equipment each year”
Equipment and stock are vital to your business. Even if you work with relatively small amounts of both you should speak with your home insurance provider in the first instance to discuss the conditions in your current policy. Setting up home business insurance will involve a straight forward initial run through of what you have and should remain fluid enough to compensate for future growth or change. It doesn’t have to be expensive either, a good insurer will be able to tailor the limit of any feature providing you with the right protection and nothing more.
Public liability and Professional indemnity insurance
Arguably the most important aspect of your business insurance but often the least understood! Liability insurance covers the public (your clients and guests) against injury or damage to property (their property) whilst on your premises. This is essentially your legal cover should a law suit arise so for a small business the correct cover here is essential as, should the worst happen, the costs could be in the millions. Should your business service should be in the form of advice Professional Indemnity cover protects you if there is failure to carry out professional duties properly. At this stage expert advice from an insurance provider is highly recommended so you are fully aware of your risks and remain confident you have adequate protection in place.
Employers’ liability insurance
If you have any other members of staff working for you in any capacity (volunteers, part-time workers, remote workers etc.) you may be legally required to have Employers’ Liability insurance in place. This is to cover any sum you are liable for should there be an accident or injury as a result of their employment with you. Like public liability, employer’s liability is a legal requirement; however some contractors will have their own. Speak with an advisor if you are ever unsure.
Product liability insurance
If your business makes or supplies any products you may require product liability insurance. This would protect you for any injury or damage caused by your product. For many businesses this can be as vital as public liability protection. If you are unsure as to whether this is relevant to you or if you are unclear as to the cover limits you require be sure to thoroughly talk this through with your insurance provider.
You don’t need to have a dedicated business vehicle to need specific business car insurance. Depending on your requirements you may be able to up-date your domestic car policy to account for your business needs. It is always advisable to declare everything to your insurer in advance to educate yourself to the risks and protect your business.
Not only can better security lower your insurance premiums but it will also deter and prevent someone from attempting a break in. With all the contents insurance in the world, prevention is better than cure! Not only will alarms, extra external locks, internal locks and safes help keep your business safe from criminals, some may be a requirement depending on what you are keeping on your premises. And they don’t have to cost the world either. Very simple measures can be purchased locally and installed yourself.
We are all guilty of accepting the cheapest options and seeing admin jobs as a time consuming annoyance. When your hard-work and livelihood could be threatened we should be considering these as the most important jobs on the list! Taking time early on to great to grips with your costs, business insurance and security will give you peace of mind and allow you to continue making the best decisions for your company.