Home Insurance and Working from Home

computer, lamp and plant on wooden desk

Analysis by the Office for National Statistics (ONS) shows that an average of 37% of working adults worked from home in 2020 and in April 2020, almost half (46.6%) of people did some work at home.

Fast forward to 2022 and this homeworking trend looks set to continue indefinitely with recent government guidelines, yet again, recommending you ‘work from home if you can’.

And, regardless of Covid restrictions, new variants of concern or government guidance in the future, after dipping their toe in the working-from-home water, a whopping 85% of UK homeworkers now want to continue having a flexible ‘hybrid’ working life.

So if you are an office worker who has previously, are currently, or might have to, work from home in the future, or whether you run your own business from home, you should fully consider any working from home insurance implications to ensure that you’re fully covered and to avoid any nasty surprises.

Here’s all that you need to know about working from home home insurance including what can affect or invalidate your existing policy, and circumstances where you may need to arrange additional homeworkers insurance cover.

In this guide:

Does working from home affect house insurance?

What insurance do I need to run a business from home?

What can invalidate house insurance?

Does working from home affect house insurance?

No, working from home does not affect your house insurance but ONLY IF you simply carry out office-based type work such as clerical duties (i.e. using a computer and telephone). Specialist remote working home insurance is not typically required for most types of office work conducted at home.

What’s more, following the Covid induced increase in the number of people working from home, most insurers no longer require that you contact them to say you’re working from home, if the nature of your work is clerical.

However, your policy terms may not be clear about working from home cover and so to be 100% certain that you’re covered, as a matter of course and for your own peace of mind, you should contact your insurer to double check.

BUT, yes, working from home does affect your home insurance if any of the following [Association of British Insurers’ (ABI) guidance] applies to you:

  • You have work-related visitors attend your home (i.e. you have in-person meetings with customers or clients).
  • Your work involves making or selling goods from your house or you store any such goods in your home, especially if these items are valuable or potentially hazardous and flammable (i.e. fireworks).
  • You provide direct services to customers in your home such as childminding, hairdressing, beauty treatments, personal training sessions or dog grooming.
  • You’ve modified your home to work from it such as erecting an office building* in the garden or converting your attic into an office, or perhaps you’ve specifically purchased new equipment solely intended for work purposes but to use at home. (Note: insurance cover for ‘business equipment’ is typically your employer’s responsibility so check with your employer if any business equipment you’re using at home is covered by your employer’s insurance.)

* Some standard home buildings insurance policies will include cover for outbuildings including an office in your garden meaning you may not need to worry about additional insurance working from home. However, you will need to make sure your insurer is aware of such an outbuilding prior to the policy inception and not all insurance policies will include cover for outbuildings, as standard, so it’s best to double check this with your insurer.

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Read more: What does buildings insurance cover? + other FAQs

What insurance do I need to run a business from home?

If you run your own business from home (i.e. you’re a sole trader running your own company and are not an employee working from home), depending on the nature of your business, you could need one or more of the following types of business insurance:

  • Public liability insurance (required if any business clients/customers or members of the public come to visit you for a meeting in your home)
  • Employer’s liability insurance (legally required if your business employs staff who come to work for you in your home)
  • Professional indemnity insurance (provides cover in the event a client or a third party claims for losses or damages they’ve sustained as a direct result of your business’s professional services or advice)
  • Goods in transit insurance (not necessarily required but is certainly a good idea if you regularly deliver goods to customers or collect merchandise from suppliers so that you’re covered against loss or damage caused to any goods during transit)
  • Product liability insurance (if your business sells products to customers this specific type of cover will assist with any injury compensation claims arising from the sale of one of your products)

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Buildings and contents cover for homeworking

Standard buildings and contents home insurance policies will not usually provide cover for your own business stock and/or equipment or possibly even your office space, so you should check with your insurer whether your basic home policy includes adequate cover or if you might need additional home insurance working from home.

When you contact your insurer they will usually ask you to confirm:

  • What type of work you intend to do from home
  • Whether you will ever have any business clients or customers visit you in your home
  • What work-specific equipment or tools you intend to use (if any) in your own home
  • Whether you intend to store any goods at home and if so, what the goods are and whether they’re hazardous

Some home insurers may add additional cover to your existing home policy, where necessary or appropriate, but other insurers may require you to take out a separate policy to specifically cover business stock and equipment, especially if the value of certain items exceeds £1,000.

You will also need to check with your insurer if any of your personal equipment used for work will be covered if you take the equipment outside of your home - this type of cover usually requires additional ‘personal possessions’ cover.

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What can invalidate house insurance?

In addition to the ABI’s guidance on what criteria can invalidate working from home house insurance (as outlined above) any of the following can also potentially cause working from home insurance issues that invalidate your house insurance:

  • Not being honest with your insurer*
  • Leaving your home unoccupied for 30 days or more
  • Having a lodger
  • Leaving windows and doors unlocked
  • Having a key safe
  • Having a cat or dog flap
  • Building or renovation works
  • Social media photos when you’re away on holiday

*If you’re not sure whether your insurer needs to be made aware of you working from home or whether your type of work may invalidate your insurance, you should always volunteer this information to your insurer to be on the safe side and so your insurer can quote for and arrange additional work from home insurance cover for you if required.

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