Statistics taken from last year show that more and more of us are trying to readjust our work/life balance and one way in which we have done this is to work from home. There are now over 4.2 million in the UK who work from home, either using their home as a base to visit clients from or who have a registered office on their property. Many people assume that their home work place is covered by their standard home insurance policy and whilst this may be the case for some policies, more often than not additional cover is necessary.
There are various reasons as to why you may need extra insurance cover if you work from home, but these can depend on the type of work you do, the size of the business, whether you have any extra staff members working on the premises, whether you have clients or customers visiting and also whether you store expensive equipment on site. Let’s take a look at the four main types of insurance you might want to consider if you work from home:
Professional Indemnity Insurance
No matter what line of business you’re in, professional indemnity insurance is an absolute must. Out of all the business insurance policies available, professional indemnity insurance should be at the very top of the list, as it provides you and your business with a safety net should anything go wrong. We’re all human and from time to time mistakes do happen. If your business provides a service that customers pay for and if at any time they feel as though you have been negligent or have made a mistake which has resulted in it costing them money, professional indemnity insurance will cover you in the event they decide to sue or claim compensation from you.
Public Liability Insurance
This type of insurance is essential if you have clients or customers visiting you at home, as it covers against the eventuality of an injury on your property as well as any accidental damage caused to your property. For example, should a client trip over a loose floorboard and have a bad fall, depending on the person, they may decide to claim compensation from you for their injury and any unpaid time from work it may cost them. Or another example, you may accidentally spill a cup of coffee over a customer’s laptop and be liable to pay repair bills. Public liability insurance will protect you from this kind of compensation cost. You must be completely honest with your insurer when you apply for this type of insurance, as regular visitors to your home workplace can substantially affect the policy. In the eyes of the insurer, more visitors means a higher risk of damage to both the property and the contents within it, including the people!
Employers’ Liability Insurance
Many businesses that operate from home tend to be one man bands or run by one or two family members. However companies that employ even a small number of staff need to, by law, have a certain degree of employers’ liability insurance. Regardless of whether the staff members are full or part time, freelancers or even volunteers, employers’ liability insurance ensures that not only are the staff members covered against anything happening to them on your property, but that your business is protected as well.
Most standard home insurance include a certain level of contents insurance as part of the policy, however these tend to be worked out according to the amount of bedrooms in a property. So, if your home office is in a separate room or building it is highly unlikely any extra equipment, such as laptops, computers, smartphones etc. will be covered. It is advisable to speak to your current home insurance provider and advise them of your work situation. They may be able to tweak an existing policy to include the extra items or they may recommend taking out a separate business insurance policy that will encompass each different aspect that is relevant to your personal situation for example extra contents insurance combined with professional indemnity insurance. Don’t presume you need to stay with the same insurer though, as it may not be your best option. The best place to start is by getting a few different business insurance quotes online to compare not only the best deals, but also the best options for you. You may also need to take into account whether you store any stock on site and if so, it is advisable to take out separate cover based on its value. Imagine how costly it would be to you and your business should a fire damage all of your stock or if you had it stolen? Simply by taking out the appropriate level of insurance, you have the peace of mind that should something unfortunate happen, you are unlikely to go bankrupt because of it.
One last thing to consider and something that is well worth checking out before taking the leap into home working is whether there are any restrictions placed on either your mortgage or your rental agreement. Check through any documents you have to make sure you are not breaching any of the terms and if you are within any doubt, contact your mortgage provider or relevant rental company to ask find out whether your home can be used as a permanent place of business.
As you can see, there are many things to consider when working from home, but all of which are of incredible importance if you want the safety and security of your business, home and staff to prosper. Quite simply, if you own a business that operates from within your place of residence we would 100% recommend that you take out a separate business insurance policy alongside your existing home insurance. If, however, you are employed by a company who allow you to work from home a couple of days a week, you shouldn’t need to take out a separate policy, as you will be insured by your employer and any equipment they provide you with should be covered under their own insurance.
As with anything, if in doubt, CHECK!