Between home-based start-ups and a move towards agile working within companies, home owners and renters alike may need to think about their insurance policy.
Working from home can be a great way to save money while taking those first steps in business. But is there a difference in insurance for home-based businesses versus commercial office space? And what kinds of insurance do you need?
Does a Home-Based Business Need Special Cover?
The answer depends very much on what kind of home-based business you’re operating, explains Allianz Insurance. You may require additional types of insurance coverage for particular business activities.
So, What is Covered (and What Isn’t) When it Comes to Working From Home?
An Allianz Home Insurance policy which includes contents cover automatically covers home-office equipment but will not in all cases cover small businesses, explains Allianz underwriter Eugene O’Sullivan.
“Personal office equipment, like computers, laptops, scanners and printers are generally covered under the contents of your home. But if you take your laptop outside the premises, it’s no longer covered. If you work between home and your office, you can specify your laptop as an all risks item on an insurance policy, so it’s covered inside and outside the home. It costs extra but if your laptop gets stolen or you drop it, it’s covered.”
Is Working From Home Covered by Home Insurance?
“Home Insurance generally covers individuals working from home, whether lone workers or employees of a business offering agile working. But if customers start visiting a property, if there are activities like manufacturing and if there's any stock at the property, which could lead to a higher risk of theft, that's where the risk increases. If those conditions exist, Allianz assess the situation on a case by case basis. It's not about the size of the company. I could be running a multimillion euro company by myself from my bedroom. It's more about the increase in risk.”
So, if your case gets referred to portfolio underwriting to be assessed, what type of questions might they ask?
Questions Insurers Might Ask
“If a carpenter is working from home, making cabinets for example, insurers will ask how many people visit the premises per week in connection with the business and whether it’s a full-time or part-time business,” continues O’Sullivan. “They will also ask for full details of all the activities that take place on the premises. If they are doing bookkeeping from home, they would be automatically covered by their Home Insurance policy but actually making the cabinets would need to be referred to an insurance company.
“If there is any material change to an insurance policy such as stock or property belonging to the business stored on the premises, employees on the premises, or customers visiting the property, seek advice from your insurer. If you are not sure, contact your insurer and they'll let you know if you need anything extra.”
Where Liability Comes In
Allianz automatically offers Public Liability cover with Home Insurance. This covers liability to domestic employees and members of the public, provided they are not on the premises for any business purposes.
“The types of home-based work we accept at Allianz require an active Public Liability Policy to be in place and we would generally not cover for any loss, damage of liability to the business,” continues O’Sullivan.
How Public Liability Works
“If, for example, the postman was putting a letter through the door and he fell on the pavement and hurt his knee, he could claim off that Public Liability,” explains O’Sullivan. “However, Public Liability would not cover someone visiting for the purpose of any business, trade, or profession, including employees.
Liability Cover for a Home Office
“At Allianz, we would ask customers whether they have separate Public Liability insurance that covers visitors to the house for purposes related to business or a separate Employer’s Liability in place to cover any potential accident if operating a business from home.
“We do cover domestic employees under our Home Insurance policy. If I had an au pair or a cleaner coming into the house and they tripped over something and hurt themselves, that would be covered.”
What Additional Policies Might I Need for Home-Based Work?
So, what are the different policies that businesses operating from home might need and in what circumstances are they necessary?
“This would depend on the business,” explains O’Sullivan, “If you are running a business from home, consult with your insurance provider to find out what your particular small business needs. Insurance needs will differ depending on whether your business supplies, manufactures, or creates a product or food, whether it’s a professional service, or you have clients visiting your home.
“These questions will help identify the coverage your home-based business needs.”
So, contact your insurance provider to find out whether your Home Insurance policy covers your home office. If you’re operating a business, no matter the size, ask yourself the above questions to help identify whether you need additional types of insurance and make sure to get covered.
This guidance is for general information purposes only.
Learn more about Allianz Home Insurance and Allianz Business Insurance.
Allianz p.l.c. is regulated by the Central Bank of Ireland. Standard acceptance criteria and policy conditions apply.