Get covered

 

We called some of the UK’s leading insurers to find out what line they take on home contents insurance for live/workers and home-workers. Here in a nutshell was their response...

Anyone buying a live/work unit will find good insurance cover is one of the main conditions for securing a mortgage. But even if you rent a live/work space you’ll need to be insured for any risk to or loss of contents and equipment. And if you employ staff or produce goods you’ll also need employer’s liability and product liability.

Can I get a special deal on my contents
insurance because I work from home?

Very few of the major insurers appear to offer specific home contents insurance packages for home-workers or live/workers at the moment.

The good news is that some take the view that if you are at home or on the premises all day you are less likely to be burgled, so offer a lower premium.

But it seems for most insurers overnight un-occupancy is more important a factor, so being present during the daytime makes little or no difference to their premium.

On the plus side, however, most will only insist you take out a commercial insurance package if there are going to be lots of customers or clients visiting you at home, or if you keep a lot of valuable stock on your premises.

How much can I insure?

With many home contents packages there is an upper limit of between £4,000 and £8,000 for office equipment cover. So if you have lots of expensive equipment you’ll probably need to plump for commercial cover.

Whatever you choose, if the equipment you’re going to use will be subject to lots of wear and tear, then it’s always a good idea to go for ‘replace as new’. And if you’re going to travel a lot make sure your insurance covers loss or damage while you’re out on the road.

Most insurers impose a limit of the number of clients or customers visiting the premises within a given week – usually about 10. Any more than this and you’ll need commercial cover, and this will usually exclude liability.

The value of stock that can be covered under a home contents policy is again usually very low – sometimes under £1,000 – and many will not insure flammable equipment, for instance peroxide if you’re a hairdresser.

Some insurers won’t insure any stock at all on a home contents policy.

Finally, if you have people working for you at your premises, you’ll need public and employer’s liability insurance.

‘For people working from home, we’d always advise them to call us so we can talk through their needs on a case by case basis,’ said a spokesperson for Lloyds Insurance.

‘It may be that our small business cover is more appropriate for their circumstances than home contents insurance, but we don’t have a specific contents insurance policy for home workers.’

As with most things, the best idea is to ring around and get lots of quotes, or contact an insurance broker and let them do the donkey work to get you the best deal for your specific circumstances.

Norwich Union

Norwich Union offers a home contents policy tailored to home-workers.

‘I was able to negotiate a home contents insurance package at a discounted rate with Norwich Union as I work from home, but am not visited by clients,’ says graphic designer Laura Warren. ‘A commercial policy wouldn’t have been appropriate for my circumstances.’

With Norwich Union you can insure office equipment up to £5,000 and stock up to £1,000. ‘It’s called a Home Plus policy and caters for small businesses,’ says household underwriting consultant at Norwich Union Paul Engledon.

‘We give a discount to people who are at home all day, based on the logic that there’s less likelihood of a break-in, but this can be offset if you do have people visiting your premises.

‘There’s also a theft restriction clause – there have to be signs of a physical break-in, so if a client that you’ve let into your premises decides to steal things then those items won’t be covered. Also, the policy doesn’t cover liability – you’d need to arrange this separately.’

Royal Sun Alliance

More Than, underwritten by Royal Sun Alliance, seems to offer one of the most attractive policies for home workers. You can insure up to £7,500 worth of equipment and up to £2,500 of stock on their home contents policy, and employer’s liability is included.

Equipment is insured on a new for old basis, but there’s no provision to increase these limits should your business expand – you’d need to take out a commercial policy.

No limits are imposed on the number of visitors you can have, but again the company stresses that any theft or damage would be excluded without evidence of a break-in or violence.

Icon

Icon insurance offers a bespoke commercial policy for people who work from home that is entirely separate to home contents insurance called Home Office.

‘We’ve been doing this for a long time and we lead the market,’ says deputy underwriter Ray Temple. ‘Policies start from £140 so there’s already a discount built in based on the fact that you’re at home all day.

‘Often if you tell your household insurer that you work from home they’ll either throw their hands up in despair or else insure your computer for a couple of grand and nothing else.

‘We sell our policies on the basis that you’re running a business, so you’ve got public, product and employer’s liability built in – and you’ll need that even if your only employee is your wife – and if you take your laptop worldwide then you’re covered.’

There’s no upper limit on clients visiting, or staff, ‘but we recognise that most people don’t tend to employ a dozen people in their house, nor do they want lots of clients in their home, because it’s their home. You can always meet them in their offices.’

Cover starts at £7,500, but ‘we’ll insure you up to £30,000, £40,000 or £50,000,’ says Ray, ‘although most policies tend to be under £20,000. Some clients may have a serious server or something that they keep on a third party premises, but any sum would be acceptable for us.’

Axa

Axa also offers individually tailored policies for home-workers. You can insure business equipment and stock jointly up to £5,000, £10,000, £15,000 or £20,000 depending on your circumstances.

Public liability insurance is included automatically on all policies and, while there are no limits on numbers of visitors or clients, no further discounts are available for being at home during the day.

Esure

Esure offers a home contents package if you work from home, but it does ‘depend on the nature of the work’. Restrictions are imposed if you have lots of clients visiting you or you keep a sizeable quantity of stock on the premises, but cases are assessed on an individual basis.

Nationwide

Nationwide offers business office equipment as standard on its home contents policy, but again has restrictions on the number of visitors, the value of any stock kept on the premises and any flammable or poisonous materials.

Churchill

Churchill will insure business office equipment up to a value of £5,000 on a home policy, but excludes liability and imposes an upper limit of 10 visitors/clients a week.

Virgin

Virgin offers £5,000 cover for equipment but none for stock. There’s no discount for being at home in the day and employer’s liability and limits on client numbers are assessed on a case by case basis, but ‘you’re likely to need a separate policy.’

Asda

Asda Insurance offers £5,000 office equipment cover as standard, but it won’t insure any stock, nor does it offer employer’s liability if you have staff.

Limits are imposed on the number of clients you can have visit your premises in a given time period but this is usually decided on a policy by policy basis.

If you are going to have stock on the premises or more than a few visitors, Asda’s advice is to seek commercial cover through a broker.

General knowledge

As a general rule there will be restrictions across all insurers on the kind of stock you can store – you won’t find many who’ll cover diamonds, precious metals, mining equipment or drugs, for instance, but we’re assuming this shouldn’t be a problem for most live/workers...

One option if you’re likely to have valuable stock above the limit covered by a home contents policy and you don’t want to take out a commercial policy is to keep the bulk of your stock at a secure storage facility, and insure through them. This way, your home contents policy is not affected.

If you’re worried about burglary it may be an idea to insure items that are both essential to running your business and particularly attractive to thieves – such as laptops or expensive personal organisers – on a separate policy. That way your contents premium won’t be subject to a big hike if they do get stolen.

Noel Isherwood runs an architecture firm in a rented live/work unit at Peabody’s Westferry development near Canary Wharf. His firm has commercial cover through Norwich Union.

‘We got the policy through a broker,’ he says. ‘It’s called an ‘office and surgery’ policy, although I’m not sure where the surgery part comes in!’

The policy includes employer’s liability, public and product liability and covers office equipment and other office contents. Crucially, however, it also provides for up to £50,000 for loss of records.

‘I think that’s the thing that was the decider for me,’ he says. ‘If you’re running a business, you want to be sure that you’re doing the best for your business and that you’ve got the best possible cover. Something like losing all your data or records could be potentially disastrous so that’s why we chose this.’