Home Insurance for Home Workers

Going to work used to mean a lengthy commute to and from an office - but now more and more people are able to work from the comfort of their own home.

New research from Post Office home insurance highlights how the home/office divide is disappearing for many workers, with people spending increasing amounts of time working from home. According to its findings, 30 per cent of UK workers have used their home as an office in the last 18 months.

Working from home can certainly remove a lot of hassle - it can be more leisurely, you can work at your own pace and you avoid the daily commute. However, it’s still important to ensure you have suitable home insurance in place to protect you in case things go wrong. Sadly however, around 89 per cent of those surveyed admitted that they may not have sufficient cover.

Do you need additional home insurance when working from home?

A standard home contents insurance policy may not cover you adequately for working from home because it will generally only cover administration duties.

Pay attention to the level of business equipment cover you have. Add up the value of items you require as part of your job - such as laptops, PCs, fax machines, mobile phones and so on - and see if they fit within the business equipment limit attached to your policy - typically this in the region of £3,000. You may also wish to take out ‘all-risks cover’ for these items in case you carry them with you outside the home.

It’s not just protecting your business equipment that’s important – there are many other additional cover aspects to look into if you’re working from home.

For example, if your job requires people to visit you at home for business purposes then look for public liability cover. This is not compulsory but will protect you against claims by anyone who visits your home in relation to your business whether they have suffered a loss or damage. Most public liability cover will also offer cover against legal fees and expenses that may be necessary as you defend yourself against a claim.

What about home insurance cover for running a business from home?

If you run your own business from home and have other people working with you, then consider employer’s liability insurance.

This enables businesses to meet the cost of damages and legal fees for employees who fall ill or are injured because of a fault by the employer or within the employer’s home. It is possible for an employee to seek a claim against negligence even if it results in the business going into liquidation.

By law, an employer must take out employer’s liability insurance for at least £5million, with most insurers typically providing around £10million of cover. It is not necessary to take out this cover however, if your business is not a limited company, if you are the only employee, or if you employ only close family members.

So what action should you take with your home insurance provider?

The first step is to contact your existing home insurer and see what cover you have in place. Unless your property is listed as business premises, then chances are you will not be covered sufficiently. Indeed even if you only plan to work from home for a few hours each week, you should still keep your insurer informed.

Many homeowners wrongly assume that their premiums will decrease if they work from home because they are spending more time in the property - keeping the home occupied, should, in theory, reduce the chances of a burglary. However, the reality is that home insurance premiums will generally increase with the more time you spend at home because there is an increased risk of accidental damage to a property while people are in it.

Check the policy limits you have in place for business equipment, and see how it may cost you to add additional cover. Also ask if your no-claims bonus will be affected if your property is used as a business premises - in some cases, your no-claims may be wiped out and you will be forced to start from scratch, which could make a separate business insurance policy more appealing.

If your current home insurance provider can’t provide the level of cover you need then use a comparison website and compare deals from other insurers. Consider the level of excess you will have to pay, how your no-claims bonus is affected by switching policies and whether the insurer provides 24hr contact numbers. By shopping around you should be able to find cheap home insurance with a level of cover that more suitably meets the needs of your business.