Running a business from home post-pandemic
The pandemic created a shift in the way businesses and individuals approach working life. Many industries found productivity remained steady or increased during the enforced working-from-home period. The result has been an unprecedented mentality shift for several sectors into permanent home-based working – or a hybrid approach.
But what does this mean for your insurance? Our article will explore some key insurance-related considerations for those running a business from home.
More people working and running a business from home
Running a business from home, or in a hybrid capacity, is now more common than ever. According to ONS data, in spring 2022, 38% of adults said they worked from home during the surveyed week.
The same data revealed one in seven working adults solely worked from home in 2022, between 27 April and 8 May, and almost a quarter in a hybrid capacity.
Additionally, CIPD data from June 2022 shows over three-quarters of employers have adopted a hybrid working model, with 44% of those saying there were no minimum expectations to attend the workplace.
Many leading businesses across a variety of sectors, including technology, social media, streaming, transportation, marketing, and even manufacturing now offer employees permanent remote or hybrid roles.
Institute of Directors Fellow Simon Elliot, head of Global Consulting firm 4xi, explains in an IoD business advice article that working from home has been proven to prosper. He adds that change is the only constant and employees now have more choice than ever.
Of course, this is new territory for many, which means business owners have many implications to consider. These range from ensuring employees have the appropriate equipment to meet the expectations of their role, to considering what insurance their business might require in this new landscape.
This fresh way of approaching work-life can have different implications for your insurance needs – which can vary depending on several factors. For example, your needs may be affected by the nature of your business and how many employees you have.
Does my home insurance offer any protection for running a business from home?
Whether your home insurance covers your business operations from home can depend on several factors. It can be subject to what you do, whether you welcome clients or other business visitors, how much of your home and which areas of your home are used for business purposes, and the terms of your home insurance policy.
The GOV.UK website states that you may even require a separate insurance policy or permissions to have a home-based business. These could include:
- Informing your landlord or mortgage provider
- Asking your local planning office – relevant for when you need to make changes to your property
- Telling your local council – relevant if you will receive deliveries or welcome large numbers of customers. Also, if you want to advertise outside your property or if you require a licence
What does my home insurance cover?
Policy inclusions and exclusions can vary between insurers, so it may be a good idea to check with your own home insurance provider to clarify what you are and aren’t covered for. However, you may be able to add home office cover, working-from-home insurance and contents cover within your home insurance policy.
Some examples of what may be covered under home office cover include:
- Cover for loss or damage to equipment and furniture within your home office
- The cost of replacing business documents and data following physical damage or loss
- Financial support if a loss of power, phone or broadband services increases your costs
Working-from-home cover might include some of the above, plus the following:
- Protection against theft or damage to your business goods – this includes deliveries left on your doorstep
- Cover if you’re not able to work from home – this type of alternative accommodation insurance could be relevant if your home needs substantial repair work resulting from an insured event
Do you need business insurance to run a business from home?
Once you’ve verified what your home insurance covers in the context of your business and its activities, it may be a good idea to look at business insurance which can help protect you and your business more broadly. Many types of business insurance aren’t essential or mandated by law for running a business from home, but they can provide invaluable protection when you most need it.
However, if you have employees, the law may require you to have employers’ liability insurance. This is a legal requirement for most businesses with staff in the UK .
In most circumstances, if you feel you need insurance for a business based at an office or other commercial premises, the same will usually apply for a home-based business.
What are the types of business insurance to consider?
There are a few types of insurance you may need to consider for your home-based business – these might include:
- Employers’ liability insurance
- Public and products liability insurance
- Professional indemnity insurance
- Office and contents cover
- Cyber insurance
How can business insurance help my home-based business?
Different types of business insurance can offer reassurance for particular circumstances. Here are a few examples of how some of the main types of cover may be able to help.
Employers’ liability insurance
If you have employees, it’s likely that you should have already taken out employers’ liability insurance. This cover is essential in most cases, so whether your employees work at your home office or elsewhere, it’s still required.
Employers’ liability cover can step in to support with the cost of compensation claims if an employee (or former employee) claims they were injured or fell ill due to their work. This could be anything from tripping and becoming injured on a piece of loose carpet when visiting your home office, to sustaining a repetitive strain injury due to an improper desk set up.
Public liability insurance
Public liability insurance can be helpful if you accept regular deliveries or routinely deal with the public. It can help to cover your legal costs, compensation, and expenses if someone says they were injured or that their property was damaged due to your business activities.
If you host client meetings or appointments at your home, there’s a risk someone could file a claim against your business. With public liability insurance as part of your business policy you can carry out your work knowing you’re covered should such an issue arise.
Professional indemnity insurance
If your business deals in providing professional advice, your service is likely to be one you’re proud of, but you still may face complaints.
Professional indemnity insurance is relevant for advice-based businesses or those providing professional services – such as management consultants or web developers. A client could come to a meeting at your home office for a consultation, or your advice could be administered over the phone or via email. Either way, they could later claim your advice or work had negative consequences for them.
Professional indemnity cover can offer a layer of protection for the legal costs you incur if a complaint progresses into a claim.
Is specialist home business insurance available?
Many insurers, such as Hiscox, provide tailored business insurance policies to the individual needs of their customers. This means you can build a policy that suits your working-from-home situation and meets your coverage requirements. It may also be possible to add relevant insurance products and tailor the cover limits according to your business circumstances.
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