Guide To Home Insurance For Home-based Workers

What cover do you need when working from home? Working from home – it’s peaceful, productive and free of responsibility… or is it? If you’re one of the growing number of people who now work from home, you’re responsible for making sure any home office equipment is safe and secure. That means it’s down to you to organise insurance against theft, loss and damage. But with this guide to home insurance for home-based workers and businesses, your contents could be insured in no time.

Types of contents insurance

There are two types of contents insurance:

* The cheapest type is an ‘indemnity’ policy, which takes into account an amount for wear and tear.
* The more costly type is a ‘new for old’ policy. This means you’ll be paid the full amount for any item lost, stolen or damaged.

Do I need additional insurance when working from home?

Your standard home contents insurance policy may not be adequate to cover you while working at home, as domestic insurance generally only covers ‘administration’ duties.

You may want to supplement your standard contents insurance by adding an ‘all-risks’ policy for business equipment. An all-risks policy can cover loss or damage, including for when a business item is taken away from home (e.g. a business laptop).

Also, if your type of home work requires visitors to the house for purposes related to the business, you should consider Public Liability Insurance. Though not compulsory, public liability cover protects you from loss or damage resulting from claims made by anyone who visits your home in connection with your business. It also covers legal fees and other expenses to do with defending a claim.

In short, read your existing contents policy and check out the level of administration duties that are covered in relation to home work, and upgrade if necessary. And if your job means occasional visitors to your home on business grounds, then consider an adequate level of public liability insurance.

What items are covered?

A typical contents insurance policy will include electrical goods (hi-fi, TV, DVD player etc), your CD and DVD collection, furniture, carpets, clothes, ornaments and paintings. Some insurers automatically cover up to £5,000 of home office equipment, but be aware – you may need additional cover for specialist items such as expensive audio visual equipment, photocopiers etc.

Contents insurance can also be extended to cover items that you leave home with, such as a laptop, computer or mobile phone. Alternatively you can insure such items separately with an ‘all-risks’ policy for business equipment.

How much cover should I have?

Keep receipts as proof of purchase and be honest with your insurance company as to how much items cost. If you under-insure your contents, you won’t receive the full compensation if you need to make a claim. Over-insure and you’ll be wasting money by paying a higher premium than needed.

Ask for advice

If you need contents insurance, or to review your policy now that you’re working from home, start by comparing quotes – you could save over £180* on home insurance.

Once you’ve found an insurer that meets your needs, get answers to the following questions before signing up to a policy:

* What exactly will it cover?
* How much will premiums cost?
* Is there a no claims bonus?
* Does the insurer provide a 24-hour legal and emergency advice helpline?
* What is the level of excess (the amount of the claim you’ll have to pay)?
* What is the level of excess to be retained by your business?

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

As mentioned earlier, you may want Public Liability Insurance if you expect visitors to your home for reasons of business. You may also be legally required to have Employer’s Liability Insurance if you have employees. There are a few exceptions to this, details of which can be found here.

There are other types of insurance you may wish to consider such as travel insurance, which is essential if you or your employees ever travel abroad.

Also, if required, make sure you upgrade your car insurance to cover business use for you and any employees who might use the vehicle. And likewise, if you use a van, you will need van insurance.

*24% of customers who received a home insurance quote between January and March 2009 and provided a best alternative price saved over £180.74.