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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 have resulted in a surge in the number of people working from home. 

And it seems that employers are continuing to allow employees to  work from home – at least for part of the week – even though the government is no longer encouraging it.

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’re employed by a company or run your own company and need small business insurance

 

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 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 calculate the cost of your contents to find out how much it would cost to replace everything you own if your home were to be destroyed by a fire.

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What insurance do I need to work from home?

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

You might 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’s 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, February 2022.)

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

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

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

For example business equipment insurance and public liability cover. If you sometimes work away from home, whether for meetings or just for a change of scene, you may also want to consider personal possessions insurance for when you're away from home. This boosts your cover for items like your phone or laptop.

If you use a van for your work, you also need van insurance.

 

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’re  working for yourself.

But bear in mind you need to have standard home insurance, covering both buildings insurance and contents insurance, in addition to any business insurance 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 insurance for employees 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. This covers the cost of any claims made against you by clients for losses which are your fault.

 

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, you should consider 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.

 

Does 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 should 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 might 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 might go up as a result.

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

 

Do I need extra home insurance cover to work from home?

If you’re working from home with just a laptop and phone, you probably don’t need any specific home working insurance. Equipment provided by an employer should be covered by them, and if you’re self-employed your equipment should be covered by your own home contents policy.

If, however, you have particularly expensive equipment that exceeds the single item limit, you need to talk to your insurance company about insuring them. You might also want to add personal possessions away from home and accidental damage to ensure you’re covered for a greater range of risks.

You might only need to arrange specialist business insurance if your business requires you to have people coming in and out of the house. If you have any questions or concerns, it’s always a good idea to tell your insurance company you’re working from home. They should  let you know if there could be any shortfalls with your current arrangements.