Tim Evershed examines the insurance implications of a widespread shift to home working post-pandemic
Although lockdown finally appears to be easing across the UK, many workers have had their working lives irreversibly changed. Surveys have shown that most of the country’s major employers are embracing new working cultures, with a mix of home and office working becoming the norm.
Companies cite ‘smart working’ and ‘flexibility’ as reasons for introducing hybrid working, with many suggesting that workers would be able to make their own choices about how often they come into the office. However, many of these employees might find their insurance policies do not cover them for work-related accidents.
During lockdown, insurers had to apply home and contents policies to home workers and the self-employed, as workers were being urged to stay at home wherever possible. However, as government advice changes, those policies may change back to ‘domestic only’.
Brian Brown, consumer finance expert at Defaqto, says: “Standard home insurance products are designed to cover your property for domestic use and not as a business, although most will allow you to do office work from home.
“If you are using your home as a business premises, storing stock and equipment at home or having customers visit, you could invalidate your policy.”
A recent survey conducted by insurer Aviva found that 48% of those working from home were operating from a table or desk in a room usually used for other purposes, while 34% were working from a home office in the main house. Meanwhile, 10% of respondents were working from a shed, garage or summer house that had been converted to a home office and another 3% hope to do this in the future.
However, the insurer warned that these locations could pose home insurance challenges, so customers are advised to check their policies before converting and ensure there is effective security in those areas too.
Gareth Hemming, managing director of personal lines at Aviva, says: “Flexible working and home-working practices have been around for some time, but they have really come into their own in the last year.
48% of those working from home in the UK are operating from a table or desk in a room usually used for other purposes Source: Aviva
“While home working is not the choice of every individual, we are likely to see more flexibility as a basic benchmark for the future, with many people working remotely at least some of the time.
“As the pandemic has continued, an increasing number of people have given thought to what they want from their careers and now three fifths of people would like to make changes to their working lives. The extent of these changes varies: in some instances people want more flexibility, such as the ability to work from home, while others wish to change their career paths completely.
Mr Hemming continues: “For those who plan to become home workers, it is always sensible to check that they have suitable cover for their circumstances. Many home insurance policies include cover for office equipment.
“To be absolutely certain, it is always best for people to check with their insurance provider.”
As the country went into lockdown in March 2020, members of the Association of British Insurers (ABI) pledged to support efforts to counter the pandemic by supporting customers adapting to working from home.
The pledge included support for office-based workers who had to move to working from home, as well as drivers needing to use their own vehicles to commute to work as a result of the pandemic. The pledges were extended during subsequent lockdowns and are now being replaced by permanent guidance.
Under the ABI’s guidance for home insurance, workers who continue to work from home will not need to contact their insurers unless:
- They have visitors to their home on business matters, for example if they have a face-to-face client meeting.
- Their business makes or sells goods from the home, or they store any of the items at home, particularly if the goods are valuable or include hazardous or flammable material.
- They are offering any other services from home, such as providing beauty treatments, hairdressing, childminding or dog grooming.
- They have adapted the property or acquired new business equipment that belongs to the home worker.
In addition, anyone who has established a business from home during the pandemic, is planning to establish a new business from home, or has moved the running of their business to their home premises, should discuss the cover required with their insurer or broker, according to the ABI.
Laura Hughes, ABI manager of general insurance, says: “Insurers have supported customers throughout the challenges of the past year, including paying up to £3bn in the UK for Covid-related insurance claims.
“As many businesses and workers adapt to more permanent and flexible ways of working, continuing the pledge to support office-based workers will be of great help to many of the UK’s 17 million home insurance customers.”
Tim Evershed is a freelance journalist