Does running a business from home affect home insurance?

29 April 2019

There are several significant advantages when it comes to working from home. It’s no surprise that by 2020, it’s estimated that some 50% of the UK workforce will perform some sort of remote work.

The home is a comfortable and controlled environment, plus, you don’t exactly have to travel far to get to the office. Currently, there are more than 4.2 million people working strictly from home, and around 2 million who work between home and the office.

Laptop on desk

Benefits of working from home

The benefits of working from home are tangible for both employers and employees. Allowing staff to work this way can lead to increased staff retention, a higher morale, and a wider talent pool to choose from. Plus, there is also a reduction in general office costs, and a reduced impact on the environment, thanks to little to no commuting.

Understandably, concerns still remain among many employers that there will be a decrease in productivity should their employees’ work from home. However, studies actually suggest that this is not the case. Reasons for this tend to be associated with a greater sense of freedom, increased happiness, and a higher level of motivation.

Reasoning behind the transition from the office to remote-work is said to be down to greater connectivity in both personal and work lives. The likes of readily available Wi-Fi and broadband, as well as cloud systems and team collaboration tools, such as Google Docs and Basecamp, means the office is no longer limited to a brick and mortar building.

What you need to work from home

As well as a computer or laptop, a strong and reliable Internet connection, and dedicated phone line are often two essentials when it comes to working from home. You may also need a printer and scanner; a desk is also advisable to help maintain productivity.

If you’re running your own business from home, you will also need insurance. Whether you have your own workshop, office, studio, or online business, insurance is a must to protect your property and livelihood.

Insurance for running your home business

Although the majority of household policies will cover your building and contents, your policy may become invalid if you fail to inform your insurer that you are working from home.

Your general household contents insurance is likely to cover a personal computer and household items but business insurance will cover all work-related equipment, including computers, printers and scanners. And if you’re an artist, it will cover all of your paint and artwork whereas if you’re a hairdresser any chairs, accessories and relevant products will also be covered.

Similarly, if you hold a substantial amount of stock as part of your business, because you prepare food, sell goods online or make products – you can also get these covered by your insurance. Your policy will be able to replace them, or give you the value that they are worth, while limiting interruption to your business.

It’s possible that working from home may be covered by your home insurance; however, every insurer is different so it’s important to check. Generally, business use is often deemed to be anything done from home in a continual or repeated way for financial gain. Your standard home contents insurance policy would likely not provide enough cover for working from home – it’s advisable to check your policy documents to find out what you’re covered for. Be Wiser is able to combine business and home insurance into one single policy. Working from home insurance, alongside your general home insurance, will save you and your business plenty of man-hours, thanks to less admin.

Running a business from home, or even working from home will vary depending on how your insurer assesses your cover. For instance, if you hold expensive equipment or expect regular visitors to the property you can anticipate a slightly higher premium.

Liability insurance for working from home

Although you may be working from home, this does not mean you cannot be liable for damages if a customer or individual is harmed by your business activity. Public liability insurance provides cover for any claims made by someone who has visited your home in connection with your work. This particular type of insurance is ideal for people with regular patients or clients coming and going, but also covers anybody else who visits the property for commercial reasons. If a customer injures themself on your premises, they may be able to sue you for damages. Public liability cover can pay for legal fees and any other expenses involved with defending your claim.

Professional indemnity is another policy that may be required, along with working from home insurance. Such cover protects the professional advice you offer to customers, which is important for medical practitioners, should patients feel the wrong treatment or diagnosis has been given. Again, this form of insurance can pay for any compensation, as well as help with the legal costs involved.