24 September 2015

Does your house insurance cover your home office?

A record number of Britons are enjoying the increased flexibility of working from home, but not every house insurance policy will cover those who have opted for the 30-second commute.

No matter how comfortable your office is, running a SOHO (small office/home office set-up) still brings its own challenges and concerns. Give yourself one less thing to worry about and check that your home insurance gives you the business cover you need.

Home insurance: know what's covered

The level of working from home insurance you require is highly specific and is likely to change as your business grows. It’s essential that you know exactly what’s covered and notify your insurer of any changes.

“Most household insurance policies don’t exclude you from running a business from your home, but there are limits to the kinds of activities your business can perform and still remain protected,” says Nationwide Product Manager Darren Black.

“There are various risks associated with different businesses,” he notes. For example, if you use your house as a dog grooming parlour, the risk of damage to carpets, wooden floors and furniture is greater than if you run a beauty salon from home.

“Insurers need to know what kind of work you are doing at home as there will be related factors that affect your home insurance,” says Black.

Specialist homeworking insurance might not always be necessary and you may find that you are already covered by your ordinary contents insurance or buildings insurance. Certain practices won’t impact on your policy, such as working from home for your employer on Fridays.

Running a business from home needn’t cause issues for your home insurance cover, but it is important to understand where they can arise.

Working from home: sizing up the risks

In our experience, there are three main reasons that working from home could affect your policy:

  • Visitors – an assumption is made that you will attract more people to your home, opening you up to potential damage or liability claims if an accident were to occur.
  • Collateral – storing supplies relating to the business in your home (e.g. an eBay shop) sets a limitation on cover required, especially in the result of fire or theft.
  • Equipment – sophisticated technology used in your house (e.g. servers for websites) may not be covered for accidental damage or theft.

Certain insurance policies are required by law. Employers’ liability insurance for example is compulsory by UK law if employees work for you on the premises. Some rental agreements or leases can also prevent you running a business from home, so it is important to be aware of how this might impact you too.

Curbing house insurance costs

Regardless of the type of business you are running, there are ways to avoid problems and keep the costs down:

  • Conduct a risk assessment of your premises and business practices, to highlight health and safety issues and address possible hazards.
  • Read the small print on your home insurance policy documentation and ensure a thorough understanding of the details.
  • Make sure information is accurate. You may find that your policy is invalid if all details relating to your business are not declared correctly.

Keeping your home covered

“Our house insurance policies are provided in good faith, based on the provision of accurate information,” says Black.

“If you run a business from home, all we ask is that you have an open and honest conversation with the adviser arranging your home insurance quote. In most cases, this will not affect your premium,” he adds.

To find out more about the options that Nationwide provide, you can read about our Home insurance products. 

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