Do I Need Business Insurance if I Work from Home?

However, there’s a common misconception that standard home insurance is enough to cover home-based business activities. Let’s take a closer look at whether you need business insurance if you work from home

Different ways of working from home

Technology: 

• Software developer
• Financial analyst

Creative: 

• Graphic designer
• Content writer

Education: 

• Online tutor
• Curriculum developer

Finance: 

• Financial analyst
• Accountant

Beauty: 

• Hairdresser or beauty therapist
• Online beauty advisor

What is working from home insurance?

Working from home undoubtedly has its benefits. You’re in control of your time and it’s often easier to balance work with the rest of your life. But if you’re not fully protected, you could be putting yourself at risk.
 
Anybody who works from home, whether you’re a freelance writer, manufacturing engineer or make-up artist, should check their home insurance policy to see if it covers you working from home.
Home insurance refers to a domestic consumer property household contents and liabilities insurance package policy and will exclude business contents and liabilities.

Business insurance refers to a commercial package insurance policy, designed to cover business contents and liabilities insurance exposures. It will not fully cover personal contents and liability insurance cover.

Therefore, you need to be aware of the risks presented from the business activities you are performing when working from home. Relying purely on home insurance is not wise: if you are working from home then you need to ensure that appropriate insurance cover is arranged.

Be sure to read your policy carefully, as it may cover some items and specifics related to your role, but not others. If you find that your home insurance policy doesn’t give you the cover you need, it’s time to think about working from home insurance.

This insurance includes several different types of cover designed to protect you and your business. You’ll be safeguarded in the event of things like theft and fraudulent credit card use and be provided with alternative accommodation should your home become uninhabitable.

More extensive cover

There are types of cover that provide more extensive protection. If you interact with the public regularly, provide a service or work in an industry with a high risk of injury or property damage, you may want to consider a more inclusive form of business insurance.

This more advanced cover is designed to protect you and your business in the event of accidental injury or damage. It can protect you from risks not covered by standard home insurance. Some of the main forms of business insurance include: 

Professional indemnity insurance

Covers legal costs and damages from professional mistakes or negligence.

Public liability insurance

Protects against claims for injury or property damage caused by the business to third parties.

Employer’s liability insurance

A legal requirement if you employ outside of family. If an employee is injured or becomes ill while working, they can claim compensation. Employer’s liability insurance can help with that, as well as legal fees.

Office insurance

Insures damage or loss of business-related equipment.

Business insurance specifically addresses commercial activities. It provides better protection for your business operations.

Evaluating your need for business insurance

The nature of your business activities while working from home will affect the need for business insurance. If you handle client data, professional indemnity insurance is important to protect against breaches or errors.

If your business involves regular interactions with clients at home, you should consider public liability insurance. It can help lessen the financial hit from injury claims on the premises.

Each business type will face unique risks. Certain professions like healthcare or construction may have legal requirements for professional indemnity or public liability insurance. Often clients themselves will want proof of insurance before securing any contracts.

Failing to meet these requirements can result in legal penalties, loss of contracts or reputational damage.

Specific risks of working from home

Business equipment is often not insured under a standard homeowner’s policy. Your computer, printer and other tools are considered commercial property and will need separate coverage.

Business insurance protects against damage, theft or loss of these items. Without this coverage, home-based workers risk significant financial losses and disruptions to their business activities.

Data security and privacy liability

Home-based businesses that handle sensitive information face an increased risk of data breaches. This includes theft and hacking.

Business insurance is important in reducing these risks. It helps by covering costs from data recovery, legal expenses and regulatory fines.

Allowing business visitors into your home also exposes you to the risk of accidents or injuries on your working premises. Public liability insurance provides protection by covering legal expenses and compensation for claims arising from such incidents.

Cost of business insurance for home-based businesses

The cost of business insurance is influenced by various factors, including the type of business. Higher-risk industries typically face higher premiums. The amount of coverage needed also impacts costs, such as the value of business equipment or the level of protection required.

Specific risks like data breaches or product liability can affect costs. It’s always wise to consider your needs carefully. Be sure to compare quotes from different insurers to find the most suitable and cost-effective coverage.

How to choose the right business insurance policy

Choosing the right business insurance policy requires careful thought. You must evaluate your business activities to decide the type of coverage you need. Think about your equipment value, your individual risks and any regulatory requirements.

Make sure you get in touch with a few different insurance companies. Compare quotes while thinking about your specific business needs. Consider coverage limits and premiums.

If you need to, seek advice from an insurance professional to make more informed decisions.

Home insurance from Towergate

We can offer home insurance including contents cover up to £100,000; alternative accommodation cover if your home becomes uninhabitable; and cover for students living away from home.

Contact us for a home insurance quote either online or by phone on 0345 266 8563.

Working from home insurance from Towergate

We can offer property insurance including specific cover for people who are working from home. The policy can cover up to £2 million plus defence costs and expenses for injury, illness and / or accidental death, which may occur at your property.

Get a working from home insurance quote online or call 0344 346 3298.

Business insurance from Towergate

When working from home, it's important to consider your risks and make informed decisions about business insurance. While your home may feel secure, risks like data breaches, client injuries and equipment damage may still exist.

Business insurance offers protection from these risks. Securing business insurance is a vital step in protecting your home-based business from unforeseen challenges.

We offer business insurance, and also cover for home workers.

Get a business insurance quote

Ready to get covered? Contact us for a business insurance quote today, either online or by phone on 0344 892 1664.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a Fellow member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

This is a marketing article by Towergate Insurance. Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

The information contained in this article is based on sources that we believe are reliable and should be understood as general information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such.