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Working from home insurance - what you need to know

The coronavirus pandemic has meant that lots of us are working more from home than in the past. We look at what this means for your home insurance – and whether you need to take action.

Home workers has video meeting

The lockdowns introduced during the Covid-19 pandemic resulted in many people working from home instead of going to their normal workplace.

And it seems that employers will continue to allow working from home – at least for part of the week – even after the pandemic is over.

Many people like working from home because it gives them the chance to spend more time with their families.

Not to mention avoid long and expensive commutes, with many saving money by working from home

But there are home insurance implications of working from home to be aware of – whether you are employed by a company or own your own small business


What does my home insurance cover?

A typical home contents insurance policy should cover many of the items and furniture you have at home against theft, loss and damage.

These might include electrical goods - computer equipment, TVs and domestic appliances, for example.  

Furniture, carpets, clothes, ornaments and paintings should also be included. 

Some insurers will automatically cover home-office equipment up to a certain value as well.

Whether or not you work from home, it’s vital that you make sure your policy is sufficient for your needs.

To do this you should work out how much it would cost to replace everything you own if your home were to be destroyed by a fire.

You should then check that your existing contents policy, or the one you are considering signing up for, provides the necessary level of protection.

There is little point in being overinsured, as this can raise your annual contents insurance premiums unnecessarily.

But if you’re underinsured, you run the risk of your insurer deciding that they’ll not pay the full amount of any claim you make.

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What insurance do I need to work from home?

If you’ve started working from home either all the time or just certain days a week since the pandemic began, you may not need any extra insurance.

You may not need to inform your insurer either.

Before COVID-19 hit the UK at the beginning of 2020, providers of home insurance often obliged customers to tell them if they regularly worked from home.

But this requirement has been relaxed and in most circumstances you no longer need to tell your insurer you’re working from home.

That’s as long as you meet the following criteria:

• You’re normally an office-based worker who has been asked by their employer to work from home.

• You don’t have visitors to your home, for example for face-to-face meetings.

• You don’t make and/or store goods at your home.

• You’re not offering services at your home such as beauty treatments or exercise classes.

• You haven’t adapted your property to accommodate your home-working, for example by building a home office in the garden.

(Note that this is the current advice provided by the Association of British Insurers at the time this guide was compiled in August 2021. It may change subsequent to this.)

You should tell your insurer if you’ve set up your own business, or are entertaining clients at your home.  

Your policy may need to be updated to reflect any new risks.

You may also need to consider some add-ons to your home insurance or new policies altogether.  

For example business equipment insurance and public liability cover.


Will my home insurance cover my office contents and business equipment?

If you’re using computer equipment provided by your company such as a laptop at home, it’s likely this’ll be covered under your employer’s own insurance policy.

You should check to make sure you don’t need any separate office contents insurance.

But a standard contents insurance policy may not be adequate to cover valuable specialist items that belong to you.

For example, expensive audio-visual equipment or a photocopier, that you use for work.

This is especially likely to be the case if these things exceed the value limit for individual items.

This could be £1,000 or £2,000 depending on the contents policy in question.

To insure high-value items such as these, you need to tell your insurer about them specifically, and your premiums will invariably go up as a result.

If you have equipment or other items that you take away from your home, you may also need to insure them when you’re away working.

Again, you should speak to your insurer about extending your home cover in this way.


Do I need business insurance if I’m working from home?

In some cases it’s worth considering getting insurance tailored to businesses if you’re working from home, especially if you are working for yourself.

But bear in mind you’ll need to have standard home insurance, covering both buildings insurance and contents insurance, in addition to any business policy.

If you hold stock for your business at home – for example if you make jewellery or are a florist – you could consider business insurance.

This type of insurance should cover you against theft or damage of your materials or finished products.


Do I need public liability insurance to work from home?

If you’re inviting clients or other members of the public into your house or flat as part of your business, you should take out a public liability insurance policy.

This  should protect you if a visitor has an accident, for example, while they’re on your property and decides to take legal action against you.


What other insurance might I need if I’m working from home?

If your business has employees who come to your home, you should also look at taking out employer’s liability insurance.

This is a legal requirement, and covers you if anything happens to a member of staff that you’re responsible for.

You could also consider taking out professional indemnity insurance to cover the cost of any claims made against you by clients for losses which are your fault.