Working from home insurance - everything you need to know
Are you a freelancer, business owner, or remote employee currently working from home? Remote working and self-employment have become increasingly more common, especially during COVID-19. For many, it's the new normal and offers lots of benefits and flexibility.
If you are working from home, you might need to update your home insurance policy. In this guide, we'll discuss all the questions you may have regarding working from home insurance.
Is working from home covered on my home insurance policy?
Generally speaking, your existing home contents insurance policy may provide enough cover for you if you're working at home for a company. Many insurers now cover general equipment such as computers, laptops, mobiles, and printers within your standard contents insurance agreement.
If you're at home more, you may wish to add certain upgrades to your policy such as accidental damage, depending on the nature of your job and the equipment you're working with.
Every insurer has different terms and conditions relating to working from home insurance. To start, check what your home insurance provider considers as business use in your policy documents. Often, 'business use' is classed as any activity completed and repeated regularly within the home, which makes money.
If you have any doubts or require additional cover, speak with your insurer or shop around for a new policy as soon as possible to ensure you're covered.
Should I tell my insurer I'm working from home?
Yes, you should always make your insurance provider aware of any permanent changes to your work situation. You may not need additional cover, but it's always best to be safe rather than sorry. If you ever need to make a claim, it could be rejected if you've failed to update your insurer.
Do I need to update my home insurance if I'm working from home during COVID-19?
If you're temporarily working from home due to COVID-19 and plan to return to the office, your existing home insurance should be enough. If this is now a permanent working arrangement, then you may need to update your insurance. Even if you don't need extra cover, you should still inform your insurers.
Should I update my policy if I'm working from home temporarily or part-time?
At the moment, it won't be necessary to update your policy. If you decide to increase the time you spend working at home (e.g. 1-2 days a week on a permanent basis) then you need to inform your insurers and add necessary additions to your policy to make sure you're protected.
Although some contents insurance covers items such as laptops within the home, it may exclude accidental damage or theft once you are outside your home. If you're travelling to and from an office or visiting clients, it's worth adding personal possessions cover to your home insurance.
Am I covered if I take office equipment home with me?
If your employer has given you equipment like a laptop, you don't need to cover this under your home insurance if you bring it home. Your employer should cover these items on their corporate insurance policy.
That being said, it's always best to check before you bring office equipment home with you. Ask your employer if business equipment is covered on their workplace policy or if you need to insure it yourself.
What type of working from home insurance do I need?
There are three types of classifications that your insurer considers when looking at your working from home status:
1. Clerical business use
If you're performing regular 'office work' or admin duties at home, this falls under clerical business use and you should tell your insurer. As discussed above, if you usually work elsewhere or occasionally work from home doing things like proofreading or checking emails, your home insurance should cover this and you don't need to tell your insurer.
If you're a business owner or sole trader using your home for an office, you may also be covered on your home insurance, but still, you need to update your insurers.
2. Business use with visitors
Do you have visitors coming to your home for business purposes? If you're a childminder, dog groomer, therapist, personal trainer, or hairdresser, to name a few, then you may require liability insurance. You'll also need to notify your insurer who can help ensure you have the correct insurance in place.
3. Other business use
This type of business use refers to those who run businesses from home and keep physical stock there. If you fall into this category, you need to tell your insurer. This may be viewed as an increased fire, theft, or liability risk by your insurance provider.
If your stock contains hazardous materials, then you'll need to inform your insurers of this too, as this may require specific insurance. You will also need to ensure your materials are stored correctly in line with any regulations. If not, this may invalidate your insurance.
What other insurance should I consider?
Depending on the nature of your job or business, your home insurance may not provide enough cover to protect yourself properly as you work from home.
Other types of insurance to look into includes:
- Accidental damage: this can be added onto your home insurance
- Public liability insurance: necessary if customers or members of the public come to your home
- Business insurance: provides you with additional cover for things like keeping your stock at home or storing specialist tools
- Personal possessions cover: this can be added to your home insurance contents policy and offers extra cover for loss or accidental damage outside your home
- Professional indemnity insurance: if you're offering services to a client and make a mistake in your work, this will help protect you if a client makes a claim against you for losses incurred due to work you’ve done
- Employer's liability insurance: essential if you have employees or colleagues working with/for you at your home or remotely
- Business car insurance: If you drive your car as part of your work
- Van insurance: this is a must if you drive a van for work e.g. tradesman
- Gadget insurance: also a consideration if you use expensive tech equipment
How does working from home affect the cost of my policy?
The cost of your home insurance all depends on what you do for a living and if you're working from home or running a business from home. You may only need to increase your content insurance by £1,000-£2,000 if you have office equipment that needs insuring.
If you set up a business, having visitors to your home could have a higher impact on your insurance policy because your home and contents will be regarded as ‘higher risk’.
There are also other factors that can change how your insurer assesses your cover. You may find your premium goes up depending on the equipment you keep in your home and how many people have access.
If your property has been adapted to suit your business, this could also affect the cost.
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