Does Home Insurance Cover My Online Retail Business?
Caeva O'Callaghan | June 29th, 2021
In 2021, more people than ever are starting a business from home. But will your home insurance cover the stock items you sell?
No. If you run a business from home, your home insurance will not cover any stock or inventory you keep in your house.
You need business insurance to cover any damage or loss that occurs in your business. In this article, we’ll cover the following questions:
- Will my home insurance cover my home business?
- Do I need extra insurance to work from home?
- Should I tell my home insurance if I run a home business?
When you have physical stock, your risk level will be different than if you ran a digital-only business. Read on to find out more.
Will my home insurance cover my home business?
In many cases, it will cover some or most of the aspects of your home business. However you may need extra insurance, depending on the type of business you run.
If you run a digital only business from your home – for example, as a freelance writer – then it’s in your best interest to tell your home insurance about it, but not strictly necessary. This is because the level of risk you’ll face working from your laptop is minimal. Put another way, nothing much different is going on in your home.
However, if you run an online retail business, you’ll likely need to store your inventory within your home. This would change the risk level: the more that’s in your house when a fire or flood happens, the more compensation the insurance company will need to provide. A large amount of stock may be a fire risk, or have other implications in your home.
Does your stock include theft-attractive goods? If you keep luxury items or electronics in your house, thieves may find out and the risk of break-ins will increase. You’ll need to up your home security, which also affects your insurance.
Your home insurance policy covers your home and your domestic contents – or in other words, your possessions. Even though you own the company, it is the company that owns the goods and therefore your company must insure the goods.
Do I need extra insurance to work from home?
You do if the risk to your home and contents changes significantly enough. It doesn’t matter whether you run your own business from home, or work from home for an employer – if your work involves low-risk activity such as working on a laptop, drawing or holding virtual meetings, you’ll be fine. Although, it’s best to still tell your insurance, as the hours your home will be occupied will have changed, which may affect your risk level.
On the other hand, if your job requires you to meet members of the public – for example, if you’re a therapist or consultant – or carry out dangerous tasks such as woodworking or cooking, your premium may change significantly.
If you run your own business, you should have business insurance, even if you work from home. The type of cover you’ll get depends on your requirements. You can get contents insurance that will cover physical stock, equipment and the items you sell, and business interruption insurance which will help tide you over if you fall ill or are injured. You will also need to seriously consider cyber insurance if you operate online. Cyber insurance will help mitigate the risk of being hacked, and your customers or employees’ vulnerable data being stolen.
Should I tell my home insurance if I run a home business?
Yes – even if your work involves low-risk activity on a day to day basis, telling your home insurance that you run a business from home will help cover you in the event something goes badly wrong.
Not telling your insurance may lead to delays and extra investigations if you need to make a claim. Purposely withholding information from your insurance for the purposes of lowering your premiums is fraud, and will cost you more in the long run – as well as affect your ability to get home insurance in the future.
Pick up the phone and talk to our insurance experts
There is no point in keeping this kind of info from your provider, so give them a quick call and they’ll be happy to make a note on your record. However, if your premiums go up or your policy changes and you aren’t happy, give us a call and we can find a better quote for you and your home business.