Business insurance for home-based workers
For many people, working from home is a dream come true. You can enjoy a peaceful atmosphere, choose your working hours, wear comfortable clothes and enjoy leisure activities in those precious hours that used to be spent commuting.
It's easy to understand why a growing number of people choose to work from home at least part of the time, but there are some responsibilities that accompany the decision. In particular, your insurance position needs to be considered carefully. The average home insurance policy is unlikely to provide all the protection you need.
What is covered by your home insurance policy?
Your standard home insurance policy covers your possessions against the possibility of loss, theft and damage. This might include many items that you would use if you are working from home – the desk and chair you work at, for example, your laptop or a TV screen you use for video conferencing.
Some insurance policies will cover up to £5,000 of home office equipment as well – check the specific terms of your policy to see what is included in your cover. However, specialist equipment is unlikely to be covered: for example, professional grade audio-visual technology, an industrial sewing machine or professional building work appliances.
You may wish to supplement your home contents policy with additional cover to protect this professional equipment. Consider whether you will only use the equipment in your home, or if you need cover for using it when out on business.
Visitors in your home: do you need public liability insurance?
Public liability insurance provides cover if someone is injured or their property is damaged due to your business activities. You may have this cover if you are an employer, but if you work for yourself you should think about whether you require this protection.
For example, you might invite a client to your home for a business meeting. They bring their own laptop along, but as they step into your living room they trip on a loose piece of carpet, causing an injury and the laptop to smash. Potentially, this person could bring a claim against you seeking compensation for the injury and the damage to their property, as well as legal fees and out-of-pocket expenses such as care costs.
You might also need public liability insurance if you never invite clients to your home. If you visit a client outside your home and cause them injury or damage their property – for example, by spilling hot coffee over them and their mobile phone – you could also face a claim.
Having an advisory role: do you need professional indemnity insurance?
Professional indemnity insurance provides protection against a claim that you gave incorrect advice to a client, or neglected to advise them about something that should have been covered in your advice. Again, if you are an employee then this type of risk will be the responsibility of your company. If you work for yourself, you should give consideration to whether you require this form of cover.
You don't have to give incorrect advice in order to require professional indemnity insurance cover. A claim could be brought against you for incomplete advice, or you may be eventually found by a judge to have acted appropriately. However, defending any claim will mean valuable time preparing documents and spending money on legal fees that you may not recover. It's best to be protected.
Getting help from others: employer's liability insurance
Being an employer doesn't have to mean having a big office and an HR department. Even if you use temporary, casual assistance – for example, asking a neighbour's teenaged child to help out with your filing or booking in appointments – this could still create an employer relationship. You could be liable even if work is carried out unpaid, for example by a volunteer or intern.
By law, you must protect employees against the risk of injury or illness by taking out an employer's liability insurance policy with at least £5 million cover. If an inspector finds that you do not have a policy in place, you can be fined up to £2,500 for each day without a policy, plus a penalty of £1,000 for failing to display an insurance certificate. Do you have the protection you need to work from home safely? Call the Stride team today to discuss your needs.