Kingsbridge insurance
Do I need business insurance if I work from home?
Working from home is now the norm for many UK contractors, freelancers, and small business owners. It offers flexibility and lower overheads, but even if your office is your kitchen table (we’ve all been there!), your business could still face risks that a home insurance policy won’t cover.
So, do you need business insurance if you work from home? In many cases, it might be something you need to consider. Here’s why…
Why your home insurance might not cover enough
Standard home insurance is designed for personal possessions and domestic use. We’d always recommend checking your current policies first to see what you are covered for already. But home insurance rarely extends to business activities and often won’t cover:
- Business equipment used for work (like laptops, stock or tools)
- Clients, suppliers, or delivery drivers injured on your premises
- Claims made due to professional services, advice, or errors
- Data loss or cyberattacks relating to business systems
The moment you start earning money from home-based services or products, your risk profile changes – and that’s when you may need to consider business insurance.
What types of cover could apply?
The kind of insurance you may need depends on how you work and what you do. It could include:
Public liability insurance
Public liability insurance helps protect against third-party injury or property damage claims. It’s relevant if:
- Clients or suppliers visit your home
- You work at client sites or in public spaces
Even one visit could result in a costly claim e.g. a client sustains an injury caused by a trip hazard in your home or you cause damage to a customer’s property during a home visit.
Products liability insurance
Similar to public liability, product liability covers third-party injury or damage but applies instead to claims caused by the products/goods you supply or manufacture (or their packaging).
This type of cover is often included under the same cover as public liability, so it’s worth checking the policy wording of any insurance you already have or plan to take out.
Professional indemnity insurance
This cover helps protect against claims of financial loss caused by your professional advice, consultancy or services. It’s often required under client contracts and is especially relevant for:
- Consultants
- IT professionals
- Designers
- Marketers
- Advisors
Holding PI insurance may also demonstrate that you’re operating as a legitimate business, which could assist an IR35 status assessment.
Employers’ liability insurance
If you employ anyone (including part-time help or family members), you could be legally required to hold this cover – though this can be dependent on your business type. It protects you if an employee suffers illness or injury due to their work for your business.
Failure to hold this insurance when required can result in fines of up to £2,500 per day.
Business contents and portable equipment cover
Most home policies don’t cover business-owned items. This cover can protect your tools, office equipment or stock kept at home and portable kit like laptops or cameras used off-site. If your work relies on physical assets, this could be essential.
Cyber liability insurance
If you’re online, cyber threats could affect your business. Whether you’re handling client data, taking payments online, or even managing email and communications, this cover can help protect against:
- Data breaches
- Ransomware
- Phishing attacks
- Associated legal or regulatory costs
What about freelancers, creatives and home-based SMEs?
Working from home doesn’t remove all risks. Freelancers and creatives (like designers, videographers, writers and developers) could face claims relating to copyright, client data, or professional output.
You can get media & creative insurance tailored to those risks, combining the covers most relevant for your work.
If you’re running a small home-based business – particularly with stock, equipment or staff – more comprehensive SME insurance protection could be beneficial.
Is business insurance mandatory?
The only insurance most home-based businesses are legally required to hold is employers’ liability insurance – and only if you employ someone.
Other covers, like public liability or professional indemnity, are optional but often required under client contracts or expected within your industry. They can also help show your business credentials and may assist your IR35 status when relevant.
Common insurance questions when working from home
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Do I need business insurance if I run a business from home?
The short answer is, yes. While mostly not mandatory, if you’re actively running a business, insurance can help protect you from risks that home insurance won’t cover – like client injuries, service errors or equipment damage.
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Do I need public liability insurance if no one visits me?
Even if you rarely receive visitors, you may work off-site or have goods delivered. If you interact with people through your business, public liability cover may still be useful.
It’s also worth noting that with public liability and products liability often covered under the same policy, if you supply or manufacturer products/goods as part of your work, you may wish to consider this type of cover – particularly if you supply products and install/service them on third-party property.
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Is business insurance required for freelancers or sole traders?
Not by law, but many clients expect it – especially professional indemnity cover. It also helps show that you’re operating as a genuine business, which may support your position in IR35 assessments if relevant.
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Can I just add business use to my home insurance?
You might be able to, but this often comes with limitations. Standalone business insurance offers more robust, tailored protection, keeping your business risks in mind.
Finding the right business insurance
Working from home doesn’t mean you’re free from business risks. A single claim could disrupt your work and finances, so having the right insurance in place could make all the difference.
As mentioned earlier, it’s always wise to check any existing policies you might have to understand what you’re already covered for. Then you know coverage gaps your new policy needs to fill. Although, even if an existing policy covers a business risk, make sure the limit offered is enough cover.
At Kingsbridge, we specialise in insurance for self-employed professionals and small businesses alike. From Contractor Insurance to Freelancer Insurance, our flexible packages combine key covers to suit your business, whether you’re a sole trader, freelancer, or running a small business from home.
And with a range of optional add-on, you can tailor your policy to your specialism and working arrangements.
Get a quote online today, or speak to our in-house insurance experts on 01242 808740 about protecting your business – wherever you work.
