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Working from home: The insurance policies you need

Public liability, employment liability and business interruption cover

Public liability

Few household policies will include public liability but as a business owner, you may need this type of cover. For example, a visitor comes to your office and trips over a loose cable that trails from your laptop across to the nearest available socket. They break a leg and are unable to work for some time. They could easily sue for loss of earnings. Without public liability cover, you will face the consequences personally.

Ray Temple, schemes underwriter for insurance broker Tolson Messenger, says that accidental damage is the most common claim but an accident is equally frequent.

“We might learn to live with a trailing wire but for a visitor who does not know the layout, such a wire is a real hazard and a potential danger.”

Employment liability

Again, employment liability will not be included as standard on any household policy. As a homeworker, you may not need such cover but the moment that you take on any staff, such a policy becomes a legal requirement.

Business interruption

This is another element that is never standard on a household policy but something that could make the difference between survival and collapse. For example, there is a fire at your house. Your household policy looks after the equipment and the cost of rebuilding but it is going to take months. Generously, the insurer has arranged B&B accommodation. It all sounds grand, but where will you operate the business from?

A specialised home workers policy will include business interruption as standard. In such a situation, this would include providing a temporary office and covering the cost of moving your office to the new premises, including additional items such as the cost of diverting your telephone calls and setting up new telephone lines.

These are not necessarily the priorities when considering whether your policy is adequate but if something did happen, these added extras would save you hundreds of pounds.

Temple says that business interruption after a fire is the most common claim but they have also handled claims for those forced to move because of subsidence and also a flood.

However, it seems that most home workers escape relatively unscathed from floods because many have an upstairs office where equipment is safe and because with floods there is often enough notice given to allow people to save their work first.

A specialised home workers policy will include business interruption as standard.

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