Home Business Insurance Explained

Our in-depth guide gives detailed insight into how you can best protect you property if you work from home, run your business from a home office or have members of the public visit your personal premises. Get tips on finding the right home business insurance policy and how to keep the costs down.
home office, home business, insurance

What is Home business insurance?

Home business or home office insurance covers your home in all the ways a standard home insurance policy would. The difference is that it includes added protection against the risks your property faces from running a business there.

If you run a business from home, and have no other business premises elsewhere you may be required to update your standard home insurance to cover the extra risks your business pose to your home. 

"My business has little or no risk – why do I need home business insurance?". Some businesses really do pose little extra risk to a property, but you could expect to see this mirrored by just a small rise in your premium. What’s important is that you highlight that business use to your insurer. As they are the ones who are agreeing to protect your home, they expect to know what they are protecting it from. If something has not been disclosed and you need to make a claim (even for something non-business related) they could have the right to reduce or even dent your claim.

What extra risks does my business pose?

Insurers are concerned with extra risk from things like:

  • Members of public on your premises

  • Fire/Theft risk from equipment or stock

  • Accidental damage while partaking in business activity

How does home business insurance work?

Our specialist advisers will help you decide on the correct levels of cover for your property including any extra equipment, amount of visitors and other business considerations. Your standard home insurance is then quoted for including the extra ‘business use’ cover. You shouldn’t pay for cover you don’t need, so you can be confident you are getting a fair price. Remember though - this is not your business insurance. It is the extra cover for the added use of your property.

Don’t forget the small things – Especially in your home or office it can be surprising how quickly things add up if you really had to replace everything. Be realistic in what is there and how much things cost.

Make sure you understand the level of cover you are agreeing to and importantly which valuable items may not be covered by your contents insurance. Items of high value and or personal items such as phones may not be included. You may then want to consider high-net worth insurance or separately insuring specific items.

Contents insurance

The contents of your home are the things that are not permanently fixed to the building itself. This means that furniture and electrical appliances are considered your home contents, but the doors and walls are considered part of the building. For further information speak to your insurance adviser.

Business equipment cover - With a Towergate policy this comes as standard cover up to £3000 (and can be raised up to £10,000) and is for items such as computer equipment, fax machines and office equipment.

home office, home business, insurance

Optional extras

  • Accidental damage cover – This is not offered as standard. You must make it clear early on that you want to be covered for accidental damage. Accidental damage is considered damage to property not classed under another insurable peril. E.g. Foot through the loft. Nail through pipe.

  • Legal cover – This is help with legal fees if legal action is taken out against you. Legal cover is not usually found as a standard policy feature but can be requested as an optional add on to your policy. As with all optional extras they are not deemed essential or legal requirements, an adviser can discuss with you the costs and levels you might be interested in.

  • Emergency Assistance – This is a particularly appealing cover for business owners who want to ensure any emergencies are dealt with as swiftly as possible. This cover provides emergency call outs 24 hours a day straight to your home. Covers plumbing, gas or electricity failure, security to windows or doors, roofing, hot water failure, vermin, central heating or boiler failure, as long as they are serviced yearly. Other typical exclusions are external water supply pipes and boilers over 15 years old.

Mike Stephens FCII

Date: August 20, 2021

Category: Home and Property

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