Working From Home – Insurance Risks

People working from home are being warned about the risk of invalidating their home insurance. With the stay-at-home order issued in March 2020, two subsequent national lockdowns and government guidance still recommending people work from home wherever possible, the number of people making adaptations to residential properties to create a long-term workspace is on the increase.

Home Workspace Conversions

Spare rooms, sheds and garages are rapidly being converted into workshops, offices and studios and for large parts of 2020, you could not get hold of a garden building for love nor money.  

But whilst it is claimed that 20% of us find working from home more stressful than being based at work, research also suggests that the work from home trend is here to stay, prompting insurers to point out the risks this poses.

Whilst some leading insurance companies are helping individuals adapt their policies to reflect their new home/work set up, it is thought that many homeowners are unaware of the need to notify their insurers about the new set-up. Whilst administrative and clerical work is unlikely to cause an issue or require a change in cover, more manual crafts that require the use of fire, heating materials or burning do need a different type of policy as does production of food for external sale.

Contents Insurance Limits

Insurers are also aware that the relocation of business to home may put household contents in excess of existing cover with stock, expensive equipment, computers and technology now being stored.  Standard home insurance products are designed to cover the property for domestic use and not as a business and whilst most will cover office work, any use outside this may invalidate the policy. Policy holders are encouraged to contact their provider and ensure that they continue to enjoy full cover for the range of uses within the property.

Business Rates

Away from question over insurance cover, those running a business from home, which is of course different to simply working from home, should enquire with their local rates collecting authority to find out if this requires them to register for National Non-Domestic Rates (NNDR) or Business Rates as they are more commonly known. If the business itself is being run from a property then this should be declared and a calculation carried out on the proportion of the property being used for this purpose. Where a garage, shed or garden building is being used, this calculation is relatively straight forward as the rates will be based on square footage, it is where the space being used is less defined that it can become harder to calculate and declare accurately. If you are required to register for business rates, it is recommended to engage the services of a commercial property surveyor to ensure all calculations and registrations are handled correctly.