Do you need insurance for your side hustle?

December 3, 2025

According to some estimates, nearly half the population (47%) is engaged in one form or another of a money-making side hustle. If you are one of these entrepreneurs working from home, you should also recognise that, without the appropriate business insurance, you might be exposing yourself to unnecessary financial risk.

Why insurance matters for home-based businesses

While you probably have home insurance, it is worth remembering that the protection is just that – a safeguard for the home you live in, rather than work in. That home insurance rarely covers the many and varied business risks you are likely to encounter, as we’ll highlight further down this article.

Why you should inform both your home insurance provider and your mortgage provider or landlord if you’re running a second business from home

If you’re operating a side business from home – whether that’s crafting, consultancy, tutoring, baking, online retail or anything else – it’s important to tell both your home insurer and your mortgage provider or landlord. This isn’t about adding hassle; it’s about making sure your cover and permissions remain valid.

Home insurance policies are written on the basis that your property is used only for domestic living. As soon as you introduce business activity, the risks can change.

If your insurer isn’t told, a claim could be reduced or refused entirely on the grounds of non-disclosure.

Your mortgage provider or landlord also needs to be aware. Many mortgages, tenancy agreements and lease terms restrict or require permission for business use.

This protects the property owner from unexpected liability or alterations to risk. Getting written consent avoids potential breaches of contract, prevents disputes, and ensures you’re compliant.

By informing both parties early, you protect your home, your livelihood, and your peace of mind – and you can arrange any additional insurance you may need, such as business contents cover, public liability or specialist home-business insurance.

The different types of business insurance to consider

Let’s take a closer look at some of the different types of business insurance for home-based businesses:

Public liability insurance

• public liability might be seen as one of those hidden, almost intangible business risks;

• you run the risk of liability if someone – whether a client, a supplier or courier, or even a passing member of the public – suffers an injury or has their property damaged when visiting or through some other contact with your home-based business;

• such public liability claims – especially if serious injury or even death is concerned – may turn into very substantial claims for compensation, so that public liability indemnity insurance might be considered essential;

Business equipment insurance and stock insurance

• probably more tangible risks concern any business equipment, stock, or other essential kit you keep at home for your side hustle;

• how would you cope if office equipment such as your computer, laptop, printer, or other devices, including any specialist tools, went missing;

• what if a fire totally consumed or severely damaged the stock you are storing at home;

• the contents insurance component of your regular home cover is most unlikely to provide protection for the loss or damage of any such equipment or stock – and that’s why business insurance matters;

Employers’ liability insurance

• if your side hustle involves the employment of anyone else – even on a casual basis – you are legally obliged to have a minimum of £5 million employers’ liability insurance;

• the law makes very few exceptions to this requirement, which nevertheless may benefit your home-based business by showing your compliance and professionalism;

Professional indemnity insurance

• any advice or recommendations you offer in the course of your side hustle may expose you to a professional liability claim;

• however well-intentioned your recommendations, you might still be mistaken in delivering advice that turns out to have cost your customer or client some financial loss or damage;

• professional indemnity insurance helps to protect you against such claims;

Cyber and data insurance

• we live in a digital age. You might find the benefits of the technology indispensable – but the damage and losses to your business might be considerable if you become the victim of cybercrime;

• cyber insurance helps to protect you against the losses you and your business may incur if your data is lost, stolen, or otherwise compromised.

Protect your side hustle

Look after the financial health and security of your side hustle by carefully reviewing any limitations of your current home insurance and investigating your options for tailored business cover.

Make the most of our experience here at Alan Blunden by telephoning 01702 826 060 for expert advice or a bespoke home-business insurance quote.