Over 3m[1] Homeworkers Potentially Operating Illegally, Warns AXA Business Insurance

Jan 21, 2013, 12:28 ET from AXA Business Insurance

LONDON, January 21, 2013 /PRNewswire/ --

As the number of people who work from home continues to rise, statistics from AXA Business Insurance suggest that the majority of the 5.4million[2] homeworkers in the UK are, probably unknowingly, operating without the insurance cover they need and over half are potentially breaking the law in the process.

According to research from AXA, 16% (over 850,000) of homeworkers employ one or more people yet only 3% (around 150,000) have employer's liability insurance[3].  Meanwhile just 14% (approx 750,000) of homeworkers surveyed say they have business car insurance yet 66% (over three and a half million) use their cars for business purposes[4].  In both instances this would mean they are operating illegally.

And aside from the legal requirements of insuring yourself if you work at home, AXA is also warning people to be aware that they should inform their home contents provider if they are working from home or they could risk invalidating their policy.

For the 10% of homeworkers who meet clients in their home, or the 30% who visit clients' premises, AXA advises that public liability insurance should be considered to protect against any accidents.  Meanwhile, only 8% have professional indemnity insurance to cover themselves for legal liability in the event of providing customers with poor advice.

One in four homeworkers admitted they were putting their businesses at risk through neglecting their insurance needs as they would not know how to fund any shortcomings if they needed to make a claim and had insufficient cover.

Darrell Sansom, Managing Director of AXA Business Insurance, said: "The number of people working from home has grown by over 20%[5] in the last ten years or so but our research shows that these people take a more relaxed view on insurance than those working from business premises.  We appreciate that generally there is no intention to break the law and that insurance is possibly not top of the priority list for many people.  However, it is absolutely vital that homeworkers check what they need to be covered for and, at the very least, meet legal requirements. We would also strongly recommend that people consider what other cover they need to protect what is, in many cases, their livelihoods."

Insurances to consider for a home-based business:

Employers' liability

Although 84 per cent of the respondents had just one employee, this insurance is still mandatory, depending on how the business has been set up.

Motor insurance

If you use your car for business, then you need to declare this and amend your car insurance to cover business usage.  Your private motor insurer may well be able to offer the cover you need, or you can buy a specific business insurance policy.

Contents insurance

If working from home, even for a portion of the working week, you must declare this to your insurer. You could invalidate your home insurance policy if you do not advise them.

Buildings insurance

Consider combining cover for your home and home office.

Public liability

If you go to clients' premises, or they come to you, then you should consider this.

Professional indemnity

This is important cover for many as it pays out for claims of negligence or poor advice - compensation and legal defence costs can be very expensive.

Product liability

If your business involves supplying products to the public, you will need this cover to protect you for claims against injury or damage from your goods. This often comes with public liability insurance.

Goods in transit

This will cover you for products or other items you send to customers.  If you are using a specialist carrier, they may have a certain amount of insurance in place already but always check this, particularly for valuable items.

Notes to Editors

About the survey

The survey was conducted by AXA on the Enterprise Nation website in October. There were approximately 250 respondents answering questions via an online form, in businesses ranging from accountants and management consultants to those in the creative industry.

About AXA Business Insurance

AXA is one of the largest general insurers in the UK and underwrites a broad range of products for individuals and businesses. AXA Business Insurance offers business insurance for sole traders, the self-employed and small businesses through its website http://business.axainsurance.com and is designed to make buying insurance fast, secure, convenient and easy-to-use. Small businesses can choose Public Liability, Employers' Liability and Professional Indemnity insurance and can tailor cover to their own requirements.

About AXA

About AXA

AXA UK is a part of the AXA Group. The AXA Group is a worldwide leader in insurance and asset management, with 163,000 employees serving 101 million clients in 57 countries. In 2011, IFRS revenues amounted to Euro 86.1 billion and IFRS Underlying Earnings to Euro 3.9 billion. AXA had Euro 1,065 billion in assets under management as of December 31, 2011.

In the UK AXA operates through a number of business units including: AXA Wealth; AXA Commercial Lines and Personal Intermediary, AXA Personal Direct and Partnerships, AXA PPP healthcare, AXA Ireland and an independent distribution business Bluefin. AXA employs over 12,000 staff in the UK.

The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISN FR 0000120628 - Bloomberg: CS FP - Reuters: AXAF.PA). AXA's American Depository Share is also quoted on the OTC QX platform under the ticker symbol AXAHY.

The AXA Group is included in the main international SRI indexes, such as Dow Jones Sustainability Index (DJSI) and FTSE4GOOD, and is a founding member of the UN Environment Programme's Finance Initiative (UNEP FI) Principles for Sustainable Insurance.

1. AXA research carried out among 250 homeworkers in October 2012

2. Figures from Enterprise Nation

3. Employers' liability is a legal requirement, unless employees are immediate family members when, although not obligatory, it is recommended

4. Business motor insurance can be bought as part of a private policy or as a standalone product. Potentially some of those researched have bought the cover they require through their private insurance but the research revealed that, even if they do, they are unaware of having done so

5. ONS data

SOURCE AXA Business Insurance