Are you covered to work from home?
There are many reasons why you may opt to work from home, such as flexible working hours, lower overheads, or just to cut out that irritating commute. But whether you're freelancer, run a business from home or simply work from home for your employer now and then, there could be implications for your home insurance.
Depending upon the profession or trade you're in, you may not be covered under the terms of your existing policy and may have to take out a dedicated business policy.
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Now let's see what you should look out for to make sure you get the right cover at the right price when working from home...
Check your existing cover
If you're thinking of working from home you should check what you are covered for under terms of your existing policy. Some home insurance contracts - and we're talking about contents insurance here, rather than buildings - provide cover for 'administration' duties while others will not cover any items that are used for 'business or professional purposes'.
In addition, some contents insuranc policies do not automatically provide cover for accidental damage to mobile phones, laptops or any portable computer equipment once they are outside the home.
So, if you use your laptop computer and mobile devices away from your property, it is probably worth adding an 'all-risks' extension to cover any loss of or accidental damage to these items, then you'll be covered whether you're at home or out and about.
If you're employed and occasionally take work home, or work from home on specified days, it is again worth checking through your policy document to see if there are any ramifications. You should also check with your employer to confirm that it carries adequate insurance for items such as mobile phones and laptops that it has issued to you.
If you run your own business and keep stock or product samples at home then you will also have to inform your insurer and make sure it is covered under the terms of your contents policy. You may need to buy a separate business insurance contract on top of your contents arrangement.
Remember that you will need buildings cover alongside your contents policy to protect you against damage to your home caused by fire, floods (including burst pipes), falling trees, storms and subsidence. If you keep flammable or hazardous materials in your home or garage, check this is covered by your contents policy. Once again, a dedicated business policy may be required.
What additional cover might you need?
If you have employees, colleagues, clients or members of the public at your home in a business capacity, you will need additional liability insurance cover.
For instance, if you have employees who will be working from your home you will need to take out employer's liability (EL) insurance.
This will cover you should you be the subject of any damages claims from an employee who has been injured or falls ill at work and it is deemed to be your fault.
An employee can claim against you even if your company has gone into liquidation or receivership and the NHS can also claim against you for ambulance and treatment costs - all of which would make for a very bad day at the (home) office!
By law you must have EL insurance that covers you for damages of at least £5million and many insurers will automatically cover you for at least £10million.
There are occasions when EL insurance is not compulsory, for instance, if your business is not a limited company, and its only employees are yourself or close family members, but it may still be wise to consider taking it out.
For more information on EL insurance, click here.
In addition to EL insurance, if you have any customers or members of the public that come into your home in a business capacity, or you go to theirs, it is highly recommended that you take out public liability (PL) insurance.
This will cover you against any claims made against you or your business should you be deemed at fault if a member of the public suffers an injury or damage to their property.
If you take out a PL insurance policy then your premium will be based upon the type of business you operate and a rating that uses, among other factors, a business's turnover to estimate its level of activity.
For more information on PL insurance, click here.
If you use your car for business purposes then there's a chance that you may have to alter your car insurance policy to cover you for any miles that you cover outside of the usual 'social only' or 'social and commuting to a single place of work/study (SDP&C).
If you or any named driver on your policy has to travel on work-related business away from the office, or your home in this instance, you'll have to make sure your car insurance covers this - and that will mean including business use on your policy. There are varying levels of cover to consider and you may have to pay more.
If the car is registered to the business then you will definitely need a policy that is tailored for business use. The same would obviously apply if you have a van.
If driving is an integral part of the job, if you are a travelling salesman for instance, then you will need a commercial travelling policy, and this usually demands a higher premium due to the high number of miles being covered each year.
Depending on your circumstances, you may be able to put some or all of your additional insurance costs through your business books, which could have cost and tax advantages. Your accountant will be able to advise you on how to proceed.
MoneySupermarket business guides
We have compiled a series of MoneySupermarket guides to help keep you informed on all aspects on business insurance; for a general guide to business insurance, click here or check out our insurance guide for small bunsinesses, here.
If you've not quite made the leap yet but are looking at starting up your own business, then be sure to read this essential guide on start-ups.
And if you're concerned about moving away from the world of Pay As You Earn (PAYE) and into the realm of self-assessment then it's worth checking out HMRC's guide to self-employmen.
Follow Les on Twitter @LesRobertsMSM