Does Running a Business from Home Affect My Home Insurance Policy?

In recent years, more people are working from home or running side-businesses from their living space. Whether you’re freelancing, selling goods, consulting, or just taking a few orders, you might wonder: does my home insurance still cover me?

Running a business from home can create risks and responsibilities that are very different from what standard home or contents insurance usually covers. In this blog we’ll go through what you need to know, and how to make sure you’re protected.

What Home Insurance Usually Covers

Here are the basics that most home & contents policies cover:

• Damage to the structure of your home from fire, storms, theft, vandalism, etc.

• Loss or damage to personal property (furniture, electronics) inside the home due to covered perils.

• Liability for accidents that happen to visitors in your home under normal non-business use.

What Home Insurance Doesn’t Usually Cover When There’s a Business

If you run a business from home, certain risks are likely not covered by your standard policy. These may include:

• Business equipment or stock: If you store inventory, trade tools, or business-specific gear at home, those items may not be covered or are only partly covered.

• Increased liability: Clients or suppliers come to your home → more foot traffic/injury risk. If someone is injured during business operations, liability might be excluded.

• Business interruption: If your home is damaged and business is disrupted, most home policies won’t cover lost business income.

• Professional liability: Errors or negligence in your business work often need a separate policy (e.g. professional indemnity).

• Municipal or regulatory issues: If your business activity changes zoning requirements or impacts other local regulations, insurers may require disclosure.

Real-World Example (from Reddit / AusLegal)

One Redditor in r/AusLegal shared:

“Running a proper business from home… handful of stock… customers come often… Then you may need a small business policy to cover related activities as well as your standard home insurance.” Reddit

They found that what seemed like a hobby could lead to denied claims because the insurer argued the business component voided standard home insurance.

What to Do to Be Properly Covered

1. Disclose your business use to your insurer. Even small side-businesses benefit from being transparent.

2. Check policies for business use: some home insurance policies have “business use” extensions you can add.

3. Separate business and personal assets: keep business stock, tools, etc. insured under appropriate business or specialty policies.

4. Liability insurance: look into public liability or professional indemnity depending on your trade or service.

5. Review limits & exclusions: Make sure your policy limit is enough to cover your business risk, and check for any clauses that exclude business activities.

Broker vs Direct in This Situation

Working with a broker can help when running a business from home:

• Brokers often know which insurers have policies that accommodate business-use in homes.

• They can compare different insurers’ business use extension options.

• Brokers can help you avoid gaps in coverage (e.g. stock-loss, liability for business visitors, etc.).

  
  

Buying direct may mean standard home policies without those extensions, so you risk being underinsured or having claims denied.

Final Thoughts

Running a business from home adds layers of risk and complexity. Being covered properly isn’t just about having home insurance, it’s about having the right insurance. Disclose, check, and use a broker if unsure.

At FergusonBrown, we help homeowners who are also business-owners make sure there are no surprises when it comes to insurance. If you’re uncertain whether your home insurance covers your business use, reach out for a policy review.