New data from online small business insurer Insurantz.com demonstrates an increasing number of entrepreneurs who are at risk to litigation, loss and other potential risks.

The research from the insurer, which is exhibiting at Business Start-up 2009, shows nearly 1 million entrepreneurs who are starting their own business from home are unwittingly putting themselves at severe financial risk by wrongly believing their businesses are covered by existing home-contents policies.

The research demonstates a real gap between what is necessary and the commercial reality. 45% of Britain’s 2.1 million home-based start-ups fail to get any small business insurance at all, risking loss of livelihood, heavy fines and crippling legal fees if things go wrong. do we have a source of data?

Nearly 1,400 home businesses launch every week with recession also driving an increase in the number of start ups and entrepreneurs trying to supplement their income.

James Pickering, managing director of Insurantz.com, said: “Start-ups are the life blood of the economy, and there is an increase in those starting a business from home which anecdotally is down to record low interest rates, speedier broadband connections, and redundancy also driving people to take the plunge. This is encouraging news for the UK economy but entrepreneurs should make sure they have the necessary cover, even if they are working from a home. Insurance can be cost effective and is now easy to buy online.”

In its research, Insurantz.com, stated home based start-ups were the least likely of all entrepreneurs to have small business insurance. Most standard home insurance policies exclude any business activity run from home, yet entrepreneurs may wrongly believe that their domestic insurance covers any potential problems. Equipment and stock kept at at home, is not covered as is any public liability or professional indemnity issues resulting from their actions. A home insurer may even have the right to turn a significant claim down such as theft, damage or arson as a result of running a business from home.