Home office cover

PolicyBee are back with another of their straightforward guides to the insurance home workers need.

They have described all the various kinds of insurance a home business might need.

And played devil’s advocate on the subject of professional indemnity insurance.

Today’s sponsored post explains how to make sure all your home office equipment is fully insured.

So your business can continue uninterrupted whatever life throws at you.

Home office cover and the dangers of underinsurance

Insuring your home is a no-brainer. As well as providing security for your financial assets, it also protects the sentimental stuff like memories and keepsakes. Your home is your castle and all that.

When you work from home, though, a break-in, fire, or flood can be even more devastating. It can disrupt your career as well as your personal life.

Home workers sometimes assume their home insurance will cover their office equipment but that’s not always the case. Some policies will cover occasional or part-time home working, while others will exclude it completely.

If in doubt, check your policy wording. And if it’s not covered, better shop around for some office insurance.

What is office insurance?
Very simply, it covers your office equipment from loss, theft, or damage.

That includes everyday things like spilling your tea on your keyboard, to more dramatic mishaps like fire and flooding.

The specifics of what’s covered are entirely up to you. It can include IT equipment like computers and printers, technical pieces of kit, furniture, plants, and office supplies.

If there’s some kind of domestic disaster, your office insurance will either replace the item, or repair it if possible. Without it, you’d have to reach into your own pocket.

What if I don’t always work at home?
If you take something like a laptop or tablet to your clients’ offices or you work in co-working spaces, consider getting some portable equipment insurance.

Otherwise, claims for these things are covered only if the incident actually occurs in your office.

Clearly, equipment that’s taken out and about is more likely to be lost, stolen, or damaged than kit that stays in your office. That’s why it usually costs a little more, relatively speaking.

What if I claim and can’t work until it’s processed?
If your home office is flooded, say, and you claim for the bits and pieces in it, your office insurance will repair or replace what’s covered.

That’s great, of course, but even the quickest insurer takes time to process claims. When you’re running your own business, that’s lost time you can ill afford.

Something called business interruption insurance can help (it’s added to your office policy).

If you can’t work from your home office, business interruption insurance covers the cost of setting up a workspace elsewhere. It’ll also cover income and profit lost in the time you’re hamstrung.

How much office insurance do I need?
This is actually pretty straightforward.

If you needed to replace every single bit of office equipment in one go, how much would it cost? That figure’s your answer, and it’s likely to be bigger than you think.

As you probably know, the higher your level of cover, the more expensive it’ll be. But, buying a lower level of cover in an attempt to save money simply isn’t the way to go. Sorry about that.

This is because of something called the ‘average rule’.
If your insurer finds out during a claim that your level of home office cover is too low, they use a formula (the average) to work out what percentage of a claim they’ll actually cover.

So, for example, if you’ve only insured 75% of your property, your insurer will only pay 75% of the amount you want to claim for.

Even if you’re not claiming for your full level of home office cover, your insurer will still reduce any claim payments by the amount you’re underinsured.

Insurers know that in some cases, underinsurance will be accidental. For that reason, some will cover underinsured claims as long as the amount insured is not less than 85% of the total value of the property insured.

To get the level of home office cover right and avoid underinsuring, add up the value of everything you own and be honest with your insurer about the value of your kit.

Do your homework
So, to sum up:
– Check your home insurance to see if your business stuff is covered.

– Keep an inventory of everything and update it regularly.

– Don’t scrimp on your level of cover.

And, if you have any more questions about home office cover and the perils of underinsurance, feel free to give us a call.

PolicyBee is a specialist professional indemnity and business insurance broker born in CEO Iain’s shed because he was so frustrated at how confusing and difficult it was to get business insurance. PolicyBee is independent, digital, and understand the problems a young, modern business has because it is one. Although it’s no longer run from the shed.

Do you have any questions about insuring your business? Let us know in the comments and Policybee will answer them in future posts.

Click here for more posts about home working insurance.