The research showed that when asked about how these home business owners prioritised key actions when they first became operational, organising insurance ranked eighth despite three in four respondents admitting they kept all their stock at home, worth £4,388 on average.
Jazz Gakhal, head of Direct Line for Business, said: “We urge anyone looking to operate as a business from home to organise home business insurance from the start.
“The potential emotional and financial loss from an accident or theft could be devastating.”
Gakhal said that stock stored at home, public liability or a loss of earnings due to an insurable event may not be covered by a standard home insurance policy.
A specialist home business insurer can offer options such as legal expenses or cover for business equipment away from home giving peace of mind to these to people conducting business from home.
There are currently 2.5 million home business owners now operating across the UK representing 52% of the total number of UK small businesses and 8% of the UK’s total workforce.
The South East and South West had the highest concentration of home business owners both representing a tenth of the total workforce in both regions.
London’s home business owner community accounts for 9% of the total four million strong workforce with more than 356,000 across the city and over 32,800 in Wandsworth alone.
Herefordshire has the largest concentration of home businesses with more than a quarter of its 92,000 total workforce operating as a home business owner, Pembrokeshire was second with 23% and Eastbourne was third with 20% of the local workforce running a business from home.
Men are more than twice as likely as women to run their own business from home with 1.7 million male home business owners across the country compared to 818,000 female home business owners.
Gakhal added: “Self-employment has been on the rise for several years and our research now shows that a great number of these people work for themselves from home.
“Once an individual has taken the decision to set up a home business it is crucial that he or she fully appreciates their responsibilities as a business owner and ensures that adequate protection is in place should anything happen to threaten what they have worked so hard to achieve.”
Jason Berry, head of distribution and strategy at Safe & Secure, said the majority of people think that their equipment will be covered by a standard home insurance policy but this assumption is incorrect.
He said: “It is not until the homeowner needs to make a claim that they realise they are not adequately insured. This results in disappointment and then frustration towards the adviser who arranged the policy.”
Berry said it is crucial that the client takes out a specialist policy which is business specific and does not fall foul to the misconception that business items are covered by a mainstream policy.
He added: “Advisers have a much better understanding of the differences in home insurance policies now than they did five years ago. They have been forced to diversify their business models to find new income streams and as a result they can offer their clients a more comprehensive insurance solution.”
