Is your home office at the heart of what you do? If that’s a ‘yes’, have you thought about how you’d manage if events conspired to put it out of action?
Let’s say light-fingered thieves break into your home and make off with your office equipment… laptop, PC, computer monitors, the whole lot. You can’t work without the tools of your trade. Can you afford to replace it all in one go?
What if a flood seeps into your house, causing water damage? Or a fire breaks out and scorches the walls. Can you afford the clean-up, decontamination, repairs, maybe even a full rebuild? Replace any ruined furniture and stock? Rent out temporary premises so you can keep trading?
Lots of hypotheticals here… not very pleasant ones. But before filing away such disaster scenarios under ‘probably won’t ever happen’, it’s worth remembering that office insurance is the simplest way to protect your home office and its contents from total wipe-out.
The alternative would be to fork out huge amounts of money to mop up the mess and keep going. Putting pressure on your finances, with no guarantee of recovery further down the line.
Maybe the question should be, then, can you afford not to insure your home office?
(We thought not.)
Home office insurance vs home insurance
You might wonder whether your existing home insurance already covers your home office contents. Surely that’d be much cheaper than taking out another policy?
It’s a fair question and something you’d have to check with your insurer.
Most home insurance policies are designed to protect the building you live in from natural disasters like fires or floods, or unforeseen events like a burst pipe or burglary. But while it pays out to fix the damage, it probably won’t cover lost, damaged, or stolen business equipment.
That said, your office contents might be covered if your home insurance policy includes contents cover for ‘clerical work’. This covers equipment used for basic office tasks, like working on a computer. You should check your policy’s limits though to see what’s included and whether the amount’s enough to replace all your equipment (electronics, furniture, stationery, pot plants, carpets, etc.).
Of course, you can raise the value limit on your home contents insurance policy if it falls short of the mark. But if you have a large amount of specialist equipment, or if you make, sell or store goods at home and want those covered too, then you’re probably better off with a home office insurance policy that’s designed for home-based businesses.
At any rate, you should let your home insurer know if you’re self-employed or running a business from home, as it could affect the price of your premium. Failure to notify them until you’re in a situation where you have to claim could invalidate your insurance.
Home office insurance 101
So, what's office insurance and what does it cover?
Well, it’s usually made up of three types of insurance: commercial property, business contents, and portable equipment.
It’s not a case of ‘all for one and one for all’, though. You can pick and choose depending on what you need.
Commercial property insurance pays to repair or rebuild your home office so long as it’s adequately secured and separate from the building you live in (like a garden office or studio). Garages and garden sheds that have been converted into home offices don’t count. They’re still part of your home and so need to be covered by your home insurance.
Business contents insurance covers your business kit, plus fixtures and fittings, if anything happens to it, like if it’s stolen, damaged, or lost. It pays for all the necessary repairs and replacements so you can get back to business asap. And it should cover everything in your home office – from your furniture and electronics to your carpets and lights, plus any specialist kit. Hired and borrowed equipment is covered too.
Last but not least, portable equipment insurance pays to repair or replace anything you carry about with you, like laptops, cameras, and phones. You may need it if your kit’s nicked from your car, you drop your phone en route to a meeting, or you leave your laptop behind on the bus. And if you travel abroad on business trips, you can add EU and worldwide cover too.
Out-of-office risks
Your home office risks go beyond the building you work in and its contents. Every business is built around the people it delivers its services to, so it’s worth keeping them in mind.
If you have visitors come to your office for meetings or consultations, then you should have public liability insurance. It covers claims you’ve injured someone or damaged their property if there’s an accident and it’s your fault. That’s your compensation and legal fees covered if the injured party takes you to court.
And let’s not forget the clients you don’t see. Just because they’re out of sight, doesn’t mean they’re out of mind. If you fail to hit their targets or you miss their deadlines, and it costs them, they could sue you too.
Of course, you can bank on peoples’ goodwill and hope they don’t hold you to account (not a good idea). Or you can cover yourself with professional indemnity insurance so you can compensate them if needed.
Lastly, home Wi-Fi networks are vulnerable to cybercriminals. Being your own boss means you’re responsible for your own IT security, and not everyone’s up to the task. Hijacked, lost, and corrupted data takes time to recover, draining your resources. In the meantime, your clients can sue you for lost data.
So, it’s worth keeping cyber insurance in mind. It covers the cost of paying an IT pro to repair and restore your systems and replace damaged hardware pronto. It covers lost income. And it offers 24-hour support and online training in all things cybercrime-related, including financial fraud. So you’re not left alone.
Image used under license from Shutterstock.
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