Insurance for people working from home

Aug 29
3 min read

Updated: 5 days ago

Introduction

A business operates from a spare bedroom, or has staff working from home two days a week, and holds a household policy and a business policy. Neither has been told about the arrangement.

The household insurer excluded business use in the wording. The business insurer rated the policy on premises that no longer reflect where the work happens. Between them there is a gap that nobody created deliberately and that surfaces when equipment is stolen, a visitor is injured, or a laptop holding customer data disappears. Each of those is an ordinary event rather than an unlikely one.

1. Insurance for people working from home sits between two policies

Understand the structural problem.

Household cover generally excludes or limits business use, and commercial cover generally assumes a business address. The activity is real and it is happening somewhere neither policy was written for.

2. Tell your household insurer

The first and cheapest step.

Many will extend or at least confirm the position for administrative work at no cost, and some will decline, which is itself information you need. Not telling them risks the whole household policy, not only the business items. That is a considerably larger exposure than the equipment being argued about.

3. Cover business equipment specifically

Home contents limits rarely stretch.

Laptops, tools, stock, cameras and specialist equipment used for work are commonly excluded from household cover or capped low. These need to be scheduled somewhere, either on an extended household policy or a business one.

4. Deal with stock held at home

The commonly forgotten item.

Online sellers and makers frequently hold significant stock at home, and household policies almost never cover it. The value is often far higher than the owner realises when it is counted properly.

5. Consider visitors to the premises

Where liability arises.

Clients, deliveries or anybody coming to a home for business purposes creates a public liability exposure that a household policy will not respond to. This applies to a therapist seeing clients as much as to a workshop.

6. Check the position for employees working at home

An employer obligation that follows them.

Duties around health, safety and equipment generally apply wherever somebody works, and employers liability cover should reflect homeworking. Insurers should be told that staff work remotely.

7. Think about data held on home devices

The exposure nobody insures.

Customer information on a personal laptop, in a home office, on a domestic network. This is both an insurance question and a data protection one, and the second usually carries the larger consequences.

8. Check your lease, mortgage or tenancy

Not only an insurance issue.

Many residential agreements restrict business use, and planning rules may apply where the use is significant or brings visitors and deliveries. A breach here can invalidate insurance as well as creating its own problem.

9. Review it as the arrangement changes

Homeworking evolves quietly.

A business that started at a kitchen table now has stock in the garage, a converted outbuilding and two staff working remotely. Each of those changes the position and none of them prompts a call to an insurer.

Where homeworking is permanent and substantial, a proper business policy with a home address is usually cheaper and cleaner than extending a household one. Owners avoid this on the assumption that commercial cover is expensive, and for a small home-based business it frequently is not.

Conclusion

Recognise that the arrangement falls between two policies neither of which was written for it.

Tell your household insurer and find out their position, schedule business equipment specifically because contents limits will not stretch, cover stock held at home, arrange liability cover if anyone visits for business purposes, tell your insurer that employees work remotely, address the data protection exposure on home devices, check your lease, mortgage or tenancy for restrictions on business use, review whenever the arrangement grows, and consider a proper business policy where homeworking is permanent.