Do you need to tell your insurers if you’re running a business from home?
It’s a good idea to do so, as your house insurance may not cover you for running a business from your home. However, our research suggests that many homeowners are not doing this.
Maybe some are deliberately not telling their insurers, because they’re wary of rising premiums. But in many cases, homeowners simply seem unaware that, if you run a business from your home, your insurer will need to know about it.
Why Do You Need To Tell Your Insurers If You’re Running a Business From Home?
Insurers typically believe that running a business from your home can increase the level of risk to your property or your contents. Most standard home insurance policies will not cover you for these risks. If you do not tell your insurer that you’re running a business from your home, they may consider it as non-disclosure, and deny you cover.
We recently saw a case in which Aviva quoted a competitive price for home insurance for a certain customer. On the surface, this customer’s risk levels seemed very low: They had no claims noted for household losses, their property was alarmed, they had a home safe for valuables that was bolted to the floor, their property was protected by electric gates, and they faced no risk of flood.
However, Aviva later found that the homeowners were using a garden room as a holistic massage therapy treatment room. As a result, Aviva promptly withdrew their quote. The home insurance would not have covered the risks associated with the massage therapy business. The homeowner would have needed a separate policy to cover these risks.
What Are The Risks of Running a Business From Your Home?
Running a business from your home can increase the chances of a loss occurring to either your property, or its contents.
Of course, the exact risks you’ll face will depend on the type of business you’re running from your home. If you’re just using a laptop in a study to run your business, then it’s unlikely to affect your risk profile. But there are some things that will certainly expose you, your home, and your contents to increased risk.
The risks may come from specialist equipment. If you’re running a home bakery, for example, you might invest in a commercial-sized oven, which could increase the risks of fire. Specialist equipment, and valuable stock, may also make thieves more likely to target your home for theft.
Yet insurers really get worried when, as part of your home business, you invite third parties onto your property. If any members of the public suffer an accident or injury while visiting your home for business purposes, your home insurance will not cover any compensation they may be due. This extends to your garden, and to any buildings in your garden.
Standard home insurance will have exclusions or conditions that deny cover for customers or suppliers visiting your home. Insurers would say that the more business visitors you receive, the greater the chance of someone being injured. This is Property Owners Liability.
Can Home Insurance Ever Cover You For Running a Business From Home?
Home insurance is not business insurance. However, at Anthony Jones, we work with some insurers who will consider home insurance independent of a business being run from home. Typically, cover would extend to:
- Buildings
- Contents
- Property Owners Liability extended to business use
- Stock (optional)
- Business equipment cover (optional)
But for any other business insurance needs, such as Professional Indemnity or Employers Liability, you would need separate business insurance.
How a Broker Can Help Make Sure You Have the Right Insurance For Your Home Business
If you are running a business from home, an insurance broker can help you ensure you get all the cover you need, for both your business and your home.
You should tell an insurance broker about:
- What you do
- What stock you carry
- Business equipment or machinery
- The need for Public (and potentially Products) Liability
- Employers Liability
- Visitors to your property
- Professional Indemnity
At Anthony Jones, we can help you access a comprehensive insurance package that will provide adequate cover for your home, your contents, and for the specific risks associated with running a business from your home. For a friendly chat with one of our insurance specialists, contact us on 020 8290 9080 or email business@anthonyjones.com.
