Has your side hustle become a business?
What starts as a side hustle can sometimes grow into something much bigger. Whether you’re selling handmade products online, selling pre-loved items, creating content or running an e-commerce venture, many home-based businesses begin as a way to earn extra income from something you enjoy.
As your sideline grows, it can be easy to focus on winning customers, building your reputation and increasing sales. However, one important area that’s often overlooked is insurance. If you’re running a business from home, it’s worth understanding how this could affect your existing cover.
When does a side hustle become a business?
The line between a hobby and a business isn’t always obvious. You might only work evenings, weekends or fit it around another job. However, if you’re regularly receiving payment for products or services, insurers are likely to view this as a business activity.
Many people assume that because they operate from home, their existing home insurance will automatically cover everything. Unfortunately, that’s not always the case.
Why running a business from home can affect your insurance
Standard home insurance is designed to protect a private residence. Once business activities are introduced, the risks can change significantly.
For example, you may keep stock, specialist equipment or tools at home. You might have customers visiting your property, or you may use part of your home in a way that creates different risks compared to normal day-to-day living.
Failure to disclose relevant business activities to your insurer could affect the cover available under your policy or the outcome of a claim.
Common risks for home-based businesses
Every home-based business is different, but some of the more common risks include:
- Damage or theft of business equipment
- Injury claims from visitors or customers
- Loss of stock following a fire, flood or theft
- Accidental damage linked to your business activities
- Liability arising from products or services you provide.
The level of cover you need will depend on the nature of your business, but understanding your risks is an important first step.
What should you do?
Depending on the nature and scale of your activities, running a business from home may affect your existing insurance arrangements.
- Start by making sure your insurer is aware of your business activities, even if they seem relatively small. You should also check whether your existing policy includes any business-related cover and consider whether additional protection may be appropriate.
Depending on your circumstances, home business insurance or other forms of business insurance for side hustles may help provide protection that better reflects the risks associated with your venture.
- As your side hustle business grows, your insurance needs may change too. What was suitable when you first started may not be enough as you take on more customers, purchase new equipment or increase your turnover.
Running a home-based business can provide flexible working hours and be financially beneficial. Whether you’re managing a small side hustle alongside your day job or operating a growing business full-time, taking the time to review your insurance can help ensure you’re properly protected.
By making sure your cover reflects your circumstances, you can focus on growing your venture with greater confidence. After all, protecting the business you’ve worked hard to build is just as important as building it in the first place. The availability and extent of your cover will vary between insurers and individual circumstances. Make sure you review your policy documentation carefully and seek advice where appropriate.
Have a chat with our team and see how we can help provide peace of mind for your home-business.
Luke Stevenson
Regional Director
Adler Fairways
