Working from home insurance
Increasing numbers of people are now working from home, however, conventional home insurance may not be enough to cover the risks to your property. You may, for example, have valuable business equipment such as computers, laptops and printers in your home which need to be insured. You also need to consider the risk of an interruption to your business if your home is destroyed by fire or there is a major flood.
Not only do you and your business face greater risks than the normal householder but the need to inform your insurer that you work from home could mean that your existing home insurance is invalidated.
However, some insurers can extend the protection provided under your existing home insurance to include the cover needed for your business. If you are unsure whether your existing policy is sufficient always inform your insurer, who will then be able to confirm whether they can provide the cover you need.
There are a number of policies available for both your business and personal insurance needs. If you are considering working from home a homeworkers’ policy may be more suitable as the cover provided is generally more comprehensive.
What working from home insurance cover is available?A homeworkers’ policy will typically offer cover for the following risks:
- Office contents
- Portable equipment (i.e. laptops, mobile phones)
- Public and employers’ liability
- Business interruption (loss of revenue due to not being able to run your business as a result of a disaster)
- Goods-in-transit cover
- Cover for business money kept on the premises, in transit or in a safe
Business legal expenses coverThe policy will typically cover the following risks:
- Personal contents
- Personal possessions cover for items taken out of the home.
What does working from home insurance cover?Both your buildings, and business and personal contents, are typically insured against a number of specified perils. This means they are covered against the loss of or damage caused as a result of:
- Fire, explosion, lightning or earthquake
- Storm or flood
- Riot, civil unrest, strikes and labour or political disturbances
- Malicious acts
- Being hit by: impact from aircraft or other flying objects, or anything falling from them i.e. vehicles or animals
- Water escaping from water tanks, pipes, equipment or fixed heating systems
- Oil leaking from a fixed heating system
- Theft or attempted theft
- Falling radio or television aerials and dishes, and their fittings and masts
- Subsidence or heave of the land that the home stands on, or landslip
- Falling trees or branches.
Accidental damage cover
Most policies will also allow you to extend the cover provided to include accidental damage. For example, if you accidentally drop your laptop and it is damaged, cover is provided for any repairs needed, or a replacement, if it is beyond repair.
Accidental damage cover is usually offered as an optional extension, which incurs an extra cost.
Other covers available
A homeworkers’ policy can provide cover for both your personal and business insurance needs. Some examples of where cover is given for both areas include legal expenses and personal possessions.
Legal expenses cover is usually available and provides confidential advice on any personal or commercial legal matter. The cover also includes the costs incurred in hiring a solicitor to help pursue or defend certain business or personal legal issues. The typical limits provided range from £25,000-£50,000.
Personal possessions cover
You can also extend your cover, at an additional cost, to include items that you take out of your home, such as sports equipment, clothing, laptop computers, cameras and jewellery. There is likely to be a cover limit for items not specifically mentioned in the policy.
Excesses and exclusions
An excess is the first part of a claim that is not covered by your insurance policy. Excesses are either applied as a compulsory excess, or can be selected as a voluntary excess, in return for a reduction in premium.
There may also be separate excesses applicable for your business insurance cover. For example, business equipment may have a compulsory excess of £100, but for claims on public liability cover an excess of £250 may be applied.
There are a number of common exclusions, which are usually referred to as ‘general exclusions’ that are applicable within a contents insurance policy. These exclusions can include losses arising out of:
- Sonic bangs
- Radioactive contamination from nuclear fuel or waste
- Wear and tear.
There are also exclusions that can apply for each section of cover and these should be read in conjunction with the general exclusions.
All insurers’ policy conditions state that you will be required to keep losses to a minimum by taking pre-emptive action to contain or prevent damage. You are required to take good care of your property and ensure it is maintained in a good condition.
Top working from home insurance tips
- Purchasing your policy directly via an insurers’ website could gain you a discount;
- Fitting approved window and door locks also generates savings with most providers;
- If you have an alarm fitted remember to inform your insurer;
- Being a member of a neighbourhood watch scheme will count in your favour;
- Higher excesses mean bigger discounts;
- Check the direct debit fee charge as many insurance providers now offer 0% fees;
- If you have another insurance policy with the same provider, mention this as you could get a premium reduction.