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.

Just because you are working from home it’s vital you don’t assume everything is covered on your standard home insurance. In fact this dual purpose use of your property can leave you underinsured or even void your insurance! How your insurance is affected will obviously depend greatly on the size and type of your business so we’ve listed a few of the main points to consider. Do some research and remember it’s generally a fairly simple process, speak with an adviser to discuss your home business insurance options.

When you have business insurance you pay to protect your stock, your employees, income and the public but what about the home you already live in and work from? This is covered by your home insurance right? Well if you are using the property for a commercial purpose then this could invalidate your current policy. Make sure you contact your home insurer and discuss how working from home affects your current protection.

Yes. As long as there is forcible entrance to or exit from your property, it is not an unoccupied property, the person is lawfully in the home, it is loss by deception, or the value of the items lost from outbuildings is high than £5000, you will be covered.

You can choose an excess from £100 to £250. If you select go for the higher amount this will reduce your premiums. Speak to one of our helpful advisors for full details.

You will be covered for up to ten visitors each week. This is not applicable if you are running a child-minding business. Please see policy wording for full details.

You are entitled to a full refund of the premium paid if you find the policy unsuitable for your needs and cancel it within 14 days of receipt of your policy documents (as long as no claim have been made). If you need to cancel your cover you will be charged relevant administration costs for setting up the policy.

Please just call us or notify us in writing with the reason for cancellation and state the date from which you need cover to cease.

Policy can be cancelled anytime and only time spent on the policy is charged, plus any admin fees. Remember, if your policy is in more than one name, all policyholders will need to
sign the letter.

If you have any other queries, please don’t hesitate to contact the customer services team on 0344 892 1750.

This is a home insurance policy with some allowance for working from home clerical equipment. Cover can be extended to a limited amount.

It’s very important to understand that your household costs are not part of your home business. Unfortunately you will not get any existing household costs past the IRS man. This means that any costs you would have had without your office being on your premises will just not fly. Think of your business as being stand-alone from your property regardless of where it is so phone line and internet rental, mortgage, council tax etc. are all attached to your property regardless of where you work.

Once you understand this you can work out the share for the bills used by your business use such as the proportion of electricity and gas for heating and lighting. If you have a dedicated phone line and internet connection this is tax deductible.

This can all be quite confusing to us but your accountant can make clear exactly where you stand and where the line is between your home and your office. Just like with your business insurance, it’s important you empower yourself with this knowledge to stay protected.

If you work from home but for an employer (rather than running your own business) there claims you can make depending on the reasons and the time you spend there. This article can tell you more.

Equipment and stock are vital to your business. Even if you work with relatively small amounts of both you should speak with your home insurance provider in the first instance to discuss the conditions in your current policy. Setting up home business insurance will involve a straight forward initial run through of what you have and should remain fluid enough to compensate for future growth or change. It doesn’t have to be expensive either, a good insurer will be able to tailor the limit of any feature providing you with the right protection and nothing more.

Arguably the most important aspect of your business insurance but often the least understood! Liability insurance covers the public (your clients and guests) against injury or damage to property (their property) whilst on your premises. This is essentially your legal cover should a law suit arise so for a small business the correct cover here is essential as, should the worst happen, the costs could be in the millions. Should your business service should be in the form of advice Professional Indemnity cover protects you if there is failure to carry out professional duties properly. At this stage expert advice from an insurance provider is highly recommended so you are fully aware of your risks and remain confident you have adequate protection in place.

If you have any other members of staff working for you in any capacity (volunteers, part-time workers, remote workers etc.) you may be legally required to have Employers’ Liability insurance in place. This is to cover any sum you are liable for should there be an accident or injury as a result of their employment with you. Like public liability, employer’s liability is a legal requirement; however some contractors will have their own. Speak with an adviser if you are ever unsure.

If your business makes or supplies any products you may require product liability insurance. This would protect you for any injury or damage caused by your product. For many businesses this can be as vital as public liability protection. If you are unsure as to whether this is relevant to you or if you are unclear as to the cover limits you require be sure to thoroughly talk this through with your insurance provider.

Not only can better security lower your insurance premiums but it will also deter and prevent someone from attempting a break in. With all the contents insurance in the world, prevention is better than cure! Not only will alarms, extra external locks, internal locks and safes help keep your business safe from criminals, some may be a requirement depending on what you are keeping on your premises. And they don’t have to cost the world either. Very simple measures can be purchased locally and installed yourself.

We are all guilty of accepting the cheapest options and seeing admin jobs as a time consuming annoyance. When your hard-work and livelihood could be threatened we should be considering these as the most important jobs on the list! Taking time early on to great to grips with your costs, business insurance and security will give you peace of mind and allow you to continue making the best decisions for your company.

To help you spread the cost of your premiums, we offer a quick and easy direct debit scheme for spreading payment over ten months. Please visit our dedicated Direct Debit page to find out more

How much time will you spend there? Do you need someone there constantly to meet clients or sign for deliveries? Do you travel a lot and therefore need to be close to transport or easy access to the CBD of your area? Does the small to medium saving make the possible complications, travel time and separation worth the cost? Not everyone has these issues and often working from home is a ‘no-brainer’ but it’s good to start out understanding exactly what you need and what is best for your business.

Do you have your office hours alone in your home or are your family/housemates around making noise? If they are, you’ll probably want some separation. Do you have stock or a lot of equipment? If so you’ll probably need a whole room? If you have regular deliveries you’ll want to try and keep everything downstairs and if you have clients come you’ll want to avoid trudging through your whole house to get to the office. Get to grips with the location and the rest becomes aesthetics.

Simple things like not having enough electrical sockets or poor lighting can ring in some initial cost to set up your office. You’re probably going to want to avoid having to crawl under desks to swap plugs or spend 10 hours in a room tanning under a garish strip light. When starting out we often won’t have the funds to start making big cost changes but simple things like this will create the foundation of a healthy working environment. The other big consideration is whether your home connections meet your business requirements. You can have the best the gadgets and singing/dancing equipment but if you can’t rely on the internet speed once everyone else in the village comes home from work, you’re going to get stressed… quickly. Cost up whether you need additional bandwidth, dedicated phones, servers etc., you know better than anyone you’re own business needs but understand that these initial spends can make the next few years growing your business all the more smoother.

If you’re blessed with a huge office then feel free to go to get your very own Pat The Dog as a focal piece. If like the rest of us you have limited space think carefully about what you need and how you move around and use your office. Arranging equipment and furniture to avoid a spaghetti junction of trailing wires and keep sitting positions as close to the natural light as possible. Creative and simple storage solutions can be designed to tidy things away, remove clutter and keep things accessible as much as possible. Keep as much clear space as possible.

If you’ve worked in this order so far the only thing (apart from your customers) to think about it is creating the personality of your office. Think about what impression you want to impart on visitors, but also importantly on yourself too. Should it be professional, relaxed, productive, smart, fun, formal, or all of the above? A few well-placed items, some colour and finishing touches will create the space that compliments the personality of your business. Don’t go overboard, it might be nice now but a year in, when your rushing to get your orders fulfilled you won’t appreciate the over-sized lamp shade that you keep knocking into every time you stand up.

While working from home is always likely to be the cheapest option for a new business there are many alternatives that are not just simply renting an office to yourself. If you are someone who will go crazy working alone all day every day or needs to resonate with other people to encourage creative thinking how much will your business suffer from choosing the wrong environment? Remember when your business suffers, so do your profits, which makes saving on office costs null and void. Be sure that working from home is the right option for you, or at least that it isn’t the only option…

• Mobile office - 4G internet, dongles, USB, tethering your smart phone… smart phones, laptops, tablets, business apps, cloud storage… The list goes on. When everything is in the cloud, and we’re all always on the move, does anyone really need an office anymore?

• Rent a desk - Rent a desk in a shared office. Run your business from a lively, professional and network friendly serviced office. Enjoy all the benefits of having a dedicated space for your business at a cost based on the amount of staff you have, not on the size of the room.

• Communal Workspaces - Communal hubs are similar to renting a desk but in this case it’s a ‘hotdesk’. Book a desk or turn up and take what’s free. Pay to access one location or work from multiple. Have all the facilities but no permanent position. It’s progressive and exciting, but probably not for everyone.

• Garden office - For a not inconsiderable cost you can purchase a flat packed office and/or storage space for your garden. If you're set on working from home but don’t have the space this could be right for you. Designed to meet requirements making them planning permission exempt, set them up yourself over the weekend.

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

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.

Buildings insurance is officially defined as the home and permanent fixtures and fittings. This includes buildings and walls, trees/hedges, paths and everything within the limits of the property. The rebuild cost is the figure you should insure for and is based on how much it would cost to rebuild the property, brick by brick. Don’t give the market value here! The re-build does not include the cost of land or added value through location etc. It should however take into consideration the cost of the demolition of the building, the clearance costs and solicitor/architect fees as well as the re-building cost itself.

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.

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.

Business or no business, every property owner should have property owners’ liability. Should a guest, client or any third party injury themselves on your property, POL can pay out should a compensation claim be brought against you. You may be liable because the property owner is responsible for maintaining the premises.

"How much should my liability insurance be?" Our policy for example is set at £2 million as standard. This is higher than a standard home insurance policy to account for the additional business use of your premises.

"I have customers visit my home" Our policy covers you for up to 10 visitors per week for business use as standard but this can be extended up to 100.

• 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.

• Business stock excluded from cover: Although some stock can be included in the cover this product is not primarily designed for businesses storing large amounts of stock on premises. If you have any queries speak to one of our advisers, who can discuss your options further.

• Cover for theft and attempted theft as long as violent or forcible means are used to enter or leave your home: Because insurance generally won’t cover you for theft from people who are invited or known to be on your property. The theft has to have occurred via a break in or by some means despite the actions taken by you to avoid such events i.e. locking the doors and windows.

• Don’t forget that this is not business insurance. It is home insurance with an allowance for your business. Your separate business insurance should cover your for things like public and employers’ liability, cash, stock, tools, and goods in transit etc.