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What insurance do I need when starting a business from home?

There are various types of insurance needed when starting a business from home. I have outlined these below to give an idea of potential risks that home startups are exposed to.

 

Commercial buildings insurance

 

The standard insurance for a home may not cover a commercial business when its created. Its advised to contact the existing insurance company to find out. One consideration is that there could be items to insure under contents insurance. The potential risks being flood, fire, storm and burglary. It is now not just a home but it is now the headquarters for the business. So it is extremely important that the building insurance covers all parts of the business.

 

Contents insurance

 

The contents insurance covers the possessions kept in the home. These normally include furniture, electronics, jewellery and money. Mainly against loss, damage or theft. Some policies may cover accidental damage. However, they will not cover items owned by the business. There needs to be a specific policy in place. It is unlikely that this can be taken out separately from the buildings insurance. It would, therefore, be best to find building insurance that includes contents.

 

Employers liability insurance

 

Employers liability insurance is for if an employee needs to claim from their employer. This could be if they were to be injured, ill or their property is damaged as a result of working for the business. Employers liability insurance covers this along with any legal costs incurred.

 

If a home startup has employees or plans to hire employees in the future then the answer is yes, the cover is needed. It is therefore important to check that this is in place.

 

Public liability insurance

 

This covers if a customer or client suffers an injury or damage to their person or property as a result of visiting the business.

 

This insurance can cover legal costs incurred if a customer or a client makes a claim and receives compensation.

 

If the nature of the business involves members of the public visiting the home or travelling to visit them this should be an essential policy.

 

For example, a customer may trip on a rug and break their ankle. The customer would have strong grounds to make a claim. It is therefore important to ask and check.

 

Professional Indemnity insurance

 

This is often referred to as PI insurance. This covers losses made from making mistakes or providing inadequate services or advice whilst working with a client. The types of claims covered by this insurance include libel and defamation, negligence and misrepresentation. As well as omissions, errors, breach of confidence and loss of information or money.

 

Employers Liability

 

This is a must-have product for any business with employees. It covers the liability of the employer against employees that want to claim for their losses. This will cover the claimants’ costs and expenses that the employer is legally liable to pay. As well as their own legal costs and legal expenses and compensation for attending court if necessary. For example, if an employee trips over a wire and is unable to work due to their injury the employer could be liable for all of the above. Due to the sensitive nature of the cover and the high potential costs involved taking this type of policy is highly advisable.

 

Mark Harrington

Managing Director

iInsure365

The problems faced when claiming on landlord insurance

Buy to let landlords will face a time when they have to make a claim on their landlord insurance. Any insurer will have their criteria applicable for a successful claim to be made. It is important for landlords to understand the expectations and what their obligations are. An explanation of the usual barriers faced are below.

Failing to give the insurer proper information or reporting the claim

 

Insurance companies aren’t going to pay out unless they have full details of the claim. It may be that there are a certain number of days in which to inform the insurance company of a claim. The usual time frame is within 30 days of the damage taking place. It is important therefore that as soon as a landlord is aware of a potential loss they notify the insurance company and complete a claim form. It is always important in relation to claims to give as much information as is possible to the Insurance company. For instance, there needs to be the correct insurance in place. Specifically, landlord insurance not just a home insurance policy. In this instance, they may not pay out.

 

Not knowing what the policy covers

 

If the property has tenants in a home insurance policy would not be sufficient. When taking out a policy be sure to read the terms and conditions and understand the cover levels.

 

Items to look out for are; malicious damage by tenants, subsidence, flood and accidental damage. Each policy will differ depending on the insurance company. Don’t hesitate to ask if you wish to have details of the policy.

 

Under Insurance

 

It is essential to not under insure the property. For example, the cost of rebuilding the property is £70,000.00 but the rebuild cost used for insurance is £35,000.00. If there was to be a claim for water damage and the cost of repairs came to £6,000.00 after the excess it would be underinsured by 50%. The claim payout would, therefore, reduce by half to £3,000.00 rather than the full £6,000.00.

 

It is very important to get this right. It is also critical to not remove index linking at renewal as often this will leave the building underinsured and exposed on a claim.

 

Fair Wear and Tear

 

A landlord insurance policy will not cover damages that relate to fair wear and tear. If any damage is due to wear and tear landlords will have to cover this as part of their “landlord business”. Even though they may not consider themselves a business in the traditional sense.

 

Damage to Unoccupied properties

 

Most landlord insurance policies will only provide cover to an unoccupied building for a limited number of days. This ranges from 14 to 90 days. It is important to be aware of what the policy allows for.

 

If it is going to be unoccupied for longer than this then the insurance company will need to be informed. They may well limit the cover to fire, lightning, explosion and aircraft damage, commonly known as FLEE cover.

 

Failing to check the tenants and/or carry out inspections

 

For a house in multiple occupation (HMO), it is now law to ensure that properties are regularly checked if a licence is in place. Insurers also expect landlords to carry out regular inspections. It is important to check the property roughly every three months. Especially considering that there are a substantial amount of problems with tenants and cannabis farms. If regular inspections are not carried out the insurer is within their rights to not pay out. Inspections are now critical.

 

Summary

 

There could be many problems experienced by landlords when making a claim on their insurance. Yet most of these will be down to sloppy practice. It is the landlords’ responsibility to ensure they are covered correctly. So it is important to check the insurance documents when they arrive. Don’t hesitate to contact us if you wish to discuss the insurance with us.

 

Winter Property Management Tips

Don’t let winter conditions force you to make a claim!

 
We have listed some tips on winter property management to ensure that your property is looked after by your tenants. Therefore ensuring that there are no unnecessary claims resulting in increased premiums:-
 
1) Make sure that the pipes and roof have insulation and the loft storage tank, if there is any, has insulation foam ensuring that they don’t freeze.
 
2) Ask your tenants to make sure that they are heating and maintaining the property correctly, even when they are not there. Tenants often don’t necessarily turn the heating on sometimes because of the cost. They do though need to ensure that it is properly heated so there are no problems with the pipes freezing.
 
3) Make sure that your stopcock is working and that your tenants know where it is.
 
4) Do you have a condensing boiler? If so, make sure to lag the outlet pipe to ensure that it doesn’t freeze during the winter. If they are not the boiler can freeze and consequently need replacing.
 
5) Make sure that your tenants have bled the radiators to release any trapped air. If the radiator isn’t warming up due to trapped air then it won’t keep the house warm.
 
6) Make sure that there are no loose guttering or overhanging trees or broken tiles at the property as these could cause damage during a storm.
 
7) Make sure that you have adequate insurance in place including having enough contents cover
 
8) Check the central heating is working properly. It may be time to have a service of the boiler to make sure that it is as efficient as possible?
 
9) Drain any outside pipes. Burst pipes can be a nightmare and often the outside pipe or water systems are overlooked.
 
10) Does your property have a working chimney? If so, make sure that it is swept on a yearly basis.
 
11) Ask your tenants to make sure if there is any build-up of snow on the roof to keep an eye on it. Often this can melt quickly and consequently cause more damage
 
12) Make sure that the roof is in good repair. Get a roofer round to ensure that there are no leaks in the roof and there are no loose tiles to cause any damage.
 
13) Get them to check all the outside gates to make sure that they are secure and not likely to come off in a storm.
 
14) If your property is empty be sure to drain down the water and keep the heating on a low temperature.
 
15) Make sure to complete any small works such as draughty doors and flimsy pipes before the winter.
 
The above property management tips are to help you to ensure that your home is protected and you don’t make unnecessary claims you don’t need to.

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01273 827090


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