Since the start of the coronavirus pandemic, the working landscape in Britain has changed beyond recognition. In the first week of April 2020, we surveyed 2,000 British adults and found 60% of them were working from home. In July 2020, we conducted another survey and found that 26% of Brits are planning to continue to work from home either permanently or occasionally after government guidelines advising against travelling to the office relax.
So what does this mean for your home insurance policy? While there is no dedicated insurance policy for people doing clerical work from home, conducting any sort of business activity from your house or flat can affect your home insurance policy, and even invalidate it in some circumstances.
Keep reading to find out what you need to do if you intend to keep working from home as part of your current role, or if you’re thinking of starting a business from your private residence.
Do I need to let my insurer know if I’m working from home?
The short answer is yes.
Most insurance companies make a clear distinction when it comes to covering property and equipment used for business vs domestic purposes. But lockdown measures brought on by COVID-19 and the shift to home working blurred the lines between business and personal and left many confused.
The Association of British Insurers (ABI) launched a pledge that absolved customers from the requirement to inform their insurers of changes in circumstances regarding working arrangements up until 1 September.
Laura Hughes, property insurance policy manager at the ABI, told us in July: “We worked with our members who write home insurance policies to show some real pragmatism and flexibility around understanding these sudden changes. That was done to ease worries for individuals facing lockdown, but also to make sure we’re speaking with one voice. It was a way for the industry as a whole to provide some clarity.”
However, research conducted by Finder as part of our industry report on home insurance during lockdown found that guidelines were not clear and varied between providers. This means that the only way to be sure you are covered is to contact your home insurance company and inform them of your situation. This way, you are unlikely to encounter any problem should you need to make a claim.
Am I covered under home insurance?
You can be covered to work from home under your standard home insurance policy, but you have to tell your insurance company that you are working from home to avoid invalidating the policy.
Additionally, some types of home working, like if you hold stock or see clients in your house or flat, do require extra cover and cannot be included in a regular building or contents insurance policy.
Am I covered under business insurance to run a business from home?
This depends on the business you run and the kind of cover you need, but you should be able to get business cover to work from home.
Different types of businesses will require different types of cover, for example, if you receive visitors or keep stock in your home. You might also want to consider your car insurance cover if you use your vehicle for work. Keep reading for more details on the kind of cover you can include in your business insurance policy.
Types of business use under home insurance
The cover you need for working from home varies depending on the kind of activity your work involves:
Clerical use. This usually refers to work done on a laptop or PC, like accounts, administration or office work. Whether you’re an employee working from home either full- or part-time, or a freelance worker in an office-based profession (such as accountant, graphic designer or freelance writer, for example), you should be covered to do this type of work from home under your contents insurance, as long as you let your insurer know that’s what you’re doing. Note that if your laptop and other work equipment belong to your employer, they are responsible for insuring it and it will probably not be included in your own cover.
Business with no visitors. If you run your own business from your home and have equipment or stock, then you’d want to make sure those are covered against damage or theft. Your home insurance is unlikely to include cover for equipment used as part of your business (this might not be the case for things like sewing or cooking equipment, so best to check with your insurer) and will almost certainly not cover your stock, so consider getting a separate business insurance policy that includes stock cover.
Business with visitors. Most insurers specify that if you receive visitors in your home as part of your business work, then you must let them know and your home insurance policy is unlikely to cover you. While this is not a legal requirement, getting a business insurance policy that includes public liability is highly recommended in this case. This type of policy covers the cost of legal representation and compensation in case a member of the public is injured or otherwise harmed on your property or through your business activity.
Employing staff. If you employ staff, even on a voluntary basis, you must take out employers’ liability insurance as a legal requirement. This covers you in case one of your employees is injured or becomes ill as a result of the work they do for you. Even if your business is run from your home, it is still legally required for you to have this cover. Depending on the policy, it might cover you for when your employees are away from your property as well (but you are only liable for injuries or illness sustained while they are performing duties for your business).
Other insurance considerations
If you run your own business or work as a freelancer, you might want to consider taking out the following policies as well:
Professional indemnity. A professional indemnity policy covers you if you provide expert advice or produce work based on your expertise as part of your business, and a client claims that you were negligent or provided inadequate results.
Product liability. If your business involves the use or sale of products and one causes illness or injury to a member of the public, a product liability policy can cover you for legal fees and compensation owed. Even if you didn’t manufacture the product, you might still have to pay compensation, so this type of cover can be invaluable for shop owners.
Car insurance for business. Similarly to home insurance, some car insurance providers might exclude business use from their cover. If you use your car as part of your business, make sure you tick the correct option when taking out a quote (when asked what you use your car for). If your business requires the use of a van, you can get commercial van cover to protect it.
Specialist/expensive equipment. Most home insurers put a limit on how much any single item insured under them can be worth. If you hold specialist or expensive equipment as part of your business, it is likely you will need to declare this separately when you take out your business contents cover.
You should be able to get some or all of these elements included in a combined business insurance policy, but make sure you shop around to find the best option for you.
If you are an employee, you don’t need to worry about these types of cover, as they either won’t apply to you, or are the responsibility of your employer.
Home insurance for the new normal
Finder published a paper in July 2020 on how the coronavirus pandemic, and subsequent rise in home working, are affecting the home insurance industry. Our paper includes original research and predictions from experts including Jimmy Williams, CEO of Urban Jungle; Amy Brettell, head of customer for UK claims at Zurich; Mark Eastham, CEO of Avantia; Yasha Kuruvilla, analyst at consultancy GlobalData; and Laura Hughes, property insurance policy manager at the ABI.
Your home insurance policy only covers your items while they are in the home. If you would like to cover your items outside of your house or flat, you will need to take out personal possessions insurance. This can usually be added to your contents insurance policy if you only perform clerical business activities at home.
If you run your own business from home, you might be able to add personal possessions cover to your business insurance, but make sure you check the details of your policy for what is and isn’t covered.
If you travel abroad often, a personal possessions insurance policy that includes cover abroad might be worth looking at (if your travel insurance doesn’t already include this type of cover).
This depends on the projected cost of the claim and your personal financial situation. The amount you will have to pay in excess can also affect the decision of whether to claim on your insurance or pay to fix the damage yourself.
When you make a claim on any insurance policy, it almost always means paying higher rates when it comes to renewal. This is why some people choose to simply pay to fix or replace the damaged item, rather than submit a claim to their insurance company.
If you decide not to make a claim, it’s still a good idea to inform your insurer of what’s happened, but make it clear this is only for their information, and you are not interested in making a claim.
This varies by provider. Insurers usually set an overall limit for all contents in the property, but you should be able to choose what this limit is.
In most cases, there will also be a per item limit, usually between £1,000-£2,000. Your policy documents will tell you what the exact figures are for you.
Recently, there has been a rise in insurers offering a more flexible and modular approach to contents insurance, to keep up with changing customer demands. If you’d like more flexible, tech-powered cover, check out companies such as Urban Jungle.
Ronny Lavie is a deputy editor at Finder, specialising in insurance content. She has almost a decade of experience writing about financial topics, including five months spent as the interim managing editor for the Fintech Times newspaper. Ronny has a Master of Arts in Creative Writing from London Middlesex University and is currently working on her first book.
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