Direct Line research shows growing home-business sector is relying on household policies

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The UKs growing army of home-based businesses are not securing adequate cover because they are relying on home insurance policies, Direct Line has warned.

According to research carried out by Direct Line, 145,000 home-based firms have not bought business insurance on the basis that their commercial activities are covered by home insurance.

In addition, the research says that two in five home businesses are not insured at all, while 29% believe they are not big enough to require it. 

While home contents policies often cover office equipment, they do not offer the leve of cover Direct Line says home business owners need.

Standard home insurance will not necessarily cover stock stored at home, public liability, or loss of earnings due to insurable events, such as flood or fire. 

For example, Direct Line has warned the one in seven home businesses that receive visits from clients at home are potentially putting themselves at financial risks if their customer is injured, or has property damaged during a visit.

Jazz Gakhal, head of Direct Line for Business, said: “Home businesses are booming at the moment; they are creating jobs and local wealth, as well as boosting the national economy by around £300 billion. With that in mind, it’s worrying to see that a significant proportion of them have not taken out business insurance to protect their assets.”

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