Can working from home have an impact on your home insurance?

The short answer is YES!

Flexible working conditions now prevalent following the COVID-19 pandemic, may be inadvertently placing your home insurance policy coverage at risk of being voided.

A standard home insurance policy will typically not provide sufficient coverage if you regularly work from home, this is especially the case if people come to your home.

All insurance policies offer varying levels of cover, include different exclusions and place differing degrees of emphasis and mitigation of circumstances when assessing claims.

Not only do individual insurance companies vary in terms of what they will cover in your policy, but they also draw a distinction between the types of home-based work activity and the nature of the employment relationship.

If you have made arrangements to work from home whether it be on a full time, part time or ad hoc basis you should contact your insurer to find out whether your particular working situation has any effect on your coverage. Even if you are working from home in a purely “clerical capacity” it is recommended that you disclose this to your insurer.

If, as a part of your working from home arrangements you have commenced a side business or you work as a contractor (generally with a registered ABN) you are potentially at greater risk of voiding your policy if you haven’t notified and sought the approval of your insurer.

Insurers have become more sensitive to risk following the incidence of major fire and flood events in recent years. Don’t assume that you will automatically be okay as our local insurance market faces increasing pressure from the global reinsurance market to tighten their policies.

What to do

Check your policy and if in doubt about your particular situation contact your insurer.

If you are in the process of purchasing or renewing your insurance your insurer will as a part of the process, ask you to disclose a range of information relevant to the policy sought. This will include whether any business or commercial activity, no matter the size or type, will be conducted at the property. Make sure that you provide full and complete disclosure and that you have a confirmation in writing of that disclosure.

Disclaimer: This article is for information purposes only and is not to be regarded as legal advice. If following contact with your insurer or insurance broker you are dissatisfied with the response or have further questions, phone or email & Legal on (02) 9328 2944 or email info@andlegal.com.au and we will assist.