Working from home, or running your own business from your home office or shed can be a liberating experience. It allows you the chance to do things at your own pace in a comfortable environment, and maybe even get a little extra time to be with your family. Working from home has become increasingly more common, with more people becoming self-employed, giving them more flexibility.
Working from home insurance
While some workers have returned to their offices, for many people the new normal is working from home due to the COVID-19 pandemic. A positive side of this has meant, with people are at home more this reduces the risk of being burgled. However, it does increase the chance of accidents in the home.
More people are carrying out office or work duties within the house, so are wondering whether home insurance covers them for business use and liability.
We look at how this affects home insurance policies, and whether you need to tell your home insurer about your new home working arrangements. We look at working from home insurance implications, and when you might need home business insurance or home insurance with business use.
How COVID-19 affects you working from home
If you're working from home full time because of COVID-19 measures, do you need to buy new home insurance for home working?
The answer is no, you don't need to arrange a new policy. You don't need to tell your insurance company if you're carrying out office work from home, as that will be included in your policy.
Most insurers will cover home office equipment within your home, as part of their home contents insurance policy, up to the limit specified for single items. If you have any doubts, you can check your insurance policy or look up the policy wording online.
Taking office equipment home, what cover do you need?
If you have equipment such as, a laptop your workplace has given you to use, you don't need to cover this under your home insurance when you bring it home.
It can be separated from your own personal home contents insurance policy if you're homeworking, because your employer will cover the items on the work insurance, specifically, the corporate insurance policy.
However, it's best to check with your employer to make sure that this is the case. If you're an employee working from home, either temporarily or potentially longer term, it's worth checking business equipment used at home is covered by your workplace policy and insurance cover, just in case.
Working from home on a temporary basis
If you're working from home temporarily, you could decide to spend more time at home and only visit the office once or twice a week in the future.
At the moment, while we adjust to the new style of working, you will be covered automatically under your existing home insurance policy and you will not have to change your insurance policy.
Damage to home equipment
If you damage my own home office equipment when working from home, you should check to see if you have accidental damage cover as part of your home contents insurance.
However, not all insurers include it as standard, so check your policy details and wording. You can ask for it to be added to your policy now, or at renewal time you please, if it belongs to you and you have paid for it.
Self-isolating away from home
Will self-isolating away from home because of COVID-19 affect my your contents insurance cover?
Most UK insurance policies allow you to be away from home for 30 or 60 days, depending on their rules. If you're going to be away from your main residence for longer than this, you need to check with your insurer. You can find the information in the wording of your policy document.
Setting up as a freelancer
If you're thinking of going freelance and setting up a business from home, it's worth considering your insurance.
If you're going to have visitors' to your home, keep stock or products at home, use your home as storage or turn one of your rooms into a treatment room (for example for hairdressing, beauty therapy or physiotherapy), then you would need to speak to your insurer first about the issues around home working business insurance.
How does home contents insurance work if you're working from home?
Working from home became the norm during lockdown, and more people made use of the flexibility of not having a regular commute. As lockdown eases, many people need or choose to work for a larger portion of the time from their own house.
When you fill out any home insurance policy application, or enter your details into an insurance comparison search service, you will usually be asked about what times of day your property is occupied. As well as if you use it as a place of work and if you receive clients to your home regularly.
If your company lets you work from home occasionally, then you probably won’t need to declare this as it’s only occasional use and you won’t be getting clients visiting you at home.
However, if you have a home business where you worked at home regularly and had extra office equipment, and have clients coming to your home, then it's important to mention it to your insurer. Otherwise, if you have to make a claim, your insurer may feel that you didn't make it clear in the original questionnaire.
The cost of insuring items from your home office under working from home insurance
You might have to pay a little extra on your premiums to insure your home contents and building structure as a result, but in some cases with people who work from home, the premiums go down.
This could be because your home is regularly occupied during the times of day when homes are usually empty, and therefore your home is less likely to be burgled.
The premiums on your home insurance if you work from home could go up because there’s extra office equipment to insure and, if you get clients, generally more risk of accidental damage, fire or theft because you have more visitors' to your home.
Extending home insurance for business use
Insurers see home businesses, but not temporary home working, as a ‘material fact’, which means this is information that is vital to the conditions of your policy. If a material fact is not declared in advance and a claim is later made, the entire policy could be invalidated once that fact is discovered.
Essentially, extending your current home insurance is probably your best bet of getting insurance for long term working from home. This is usually quite easy to do, and is generally cheaper than taking out a specialist work from home insurance policy. But this also depends on the level of cover you need.
How much extra insurance cover do you need in order to work from home?
You might only need cover for an extra £1,000 or £2,000 on your contents insurance if you have office equipment that needs protecting.
This could be to cover stock that you produce at your home, computers and printers, or a specialist chair if you provide beauty therapies at home. Cover will usually only be for theft, flooding and fire damage on items essential to the business and not things like cash.
If your home business means you regularly receive cash at home, then you may need to find a safer way of handling it. Cash you keep at home is unlikely to be covered by any insurer, so make sure you have a way of dealing with this.
Telling your home insurer about setting up your own business
If your circumstances change during the course of your home insurance term, be sure to declare this as well. For example, you could have a standard home contents insurance policy, which you took out while you were working for your employer. Say, three months later you quit your job to start your own business at home, but you did not declare it to your insurer. You would risk invalidating your policy if you tried to make a claim in the future.
Similarly, if you had insurance for working from home, but you quit your home business and your home was no longer used as a place of work, you could stand to save money on your insurance if you let your insurer know.
Often when extending your insurance for a home business it might cost you very little each year, so it can be a valuable investment and the safer option to avoid invalidating your policy.
The different types of home insurance for working from home
Most home insurance policies cover business equipment as standard, but not all of them will, so again, check the terms and conditions of the cover before parting with your money.
The level of cover you are likely to receive on business equipment will vary significantly between each insurance provider as well, so be thorough in your comparisons — it could save you hundreds of pounds in the long run.
There are three main types of home insurance categories for working from home. These are clerical use, regular business visitors' and other business use.
Clerical business use This defined as having office equipment at home and working in an office space kind of environment at home. If you travel regularly for business then make sure your contents insurance covers your necessary equipment when you take it out of the home.
Regular business visitors insurance This for businesses who have regular clients visiting the home. If you're a mortgage broker, massage therapist or accountant where it is very common to have regular business visitors, then your home contents could be considered to be at greater risk. As a result you would have to declare this, and it could increase the cost of your home insurance premiums.
Other business use insurance This relates to having some other use for areas of your home. For example, you might use your shed to build furniture that you sell or use your kitchen to make food that you sell.
There are other considerations to look into if you work from home.
Business insurance You may also need business insurance, which protects your business, rather than your home.
Public liability insurance Public liability insurance protects you in the event that someone makes a claim against you. If you're self-employed, public liability insurance is not a legal requirement, but good practice to have because it protects you against damage or injury to a third party.
Professional indemnity insurance You might also need professional indemnity insurance to cover you if a client holds you responsible for negligent work.
For example, you are an accountant and make a mistake in someone’s tax returns, and they receive a fine, they might hold you responsible. Your public liability insurance might be able to cover you if you had to pay for that fine.
