Home and Contents Insurance vs Business Insurance
In many cases, your insurance needs are pretty obvious – your home is your home, your business is your business, and each has a policy to suit.
But if you’re running a business from home, the lines can get a little blurry.
What is Home & Contents Insurance?
Home and Contents Insurance is what it sounds like – insurance that provides cover for your home and its contents. That is, cover for your house itself and permanent fixtures like garages, fences and decks, as well as contents items like furniture and appliances.
You can choose a Building Only policy if you just want to insure the house and those permanent fixtures. You can also choose a Contents Only policy if the house is otherwise taken care of – for example, if you’re renting and the house is insured by the landlord – but you want to insure your own stuff.
But if you run a business from home, your Home & Contents policy may come up short at claims time.
Does Home & Contents Insurance cover my home business?
Generally, no. Home Insurance policies typically aren’t designed to cover the extra risks presented by a home business, as opposed to a commercial insurance policy for a home-based business.
AAMI Building Only and Contents Only policies exclude coverage for liability caused by, connected with, or arising from any business activity.
For clarity, the relevant Product Disclosure Statements – which outline coverage details – define “Business activity” as:
- any activity specifically undertaken for the purposes of earning an income, or
- any activity registered as a business and which you are obliged by law to register for GST purposes.
FYI, there’s no PDS for AAMI Home & Contents Insurance, but checking both the Building Only and Contents Insurance PDS should paint the full picture.
AAMI Contents Insurance policies also exclude coverage for stock or samples related to business activities. Such policies do offer up to $2,000 of coverage for tools of trade and equipment used for business activities, though this excludes home office equipment.
What is Business Insurance?
Business Insurance policies offer coverage for business if they incur loss or are liable for costs related to an insured event. Coverage types can vary depending on the needs of any given business, but policies can include things like the following:
- Public Liability Insurance to help businesses cover costs related to loss or damage sustained by members of the public.
- Cover for property damage, to help repair or rebuild your business premises if needed.
- Commercial Motor Insurance, if your business relies on vehicles.
- Cover for equipment breakdown, if your business relies on specialised equipment.
Do I need Business Insurance for a business I run from home?
Good question! Running a business from home carries risks that aren’t necessarily covered under a standard home and contents policy.
Given the differences between Home & Contents Insurance and Business Insurance, you may assume that at least two separate policies are required to ensure you have the coverage you need.
But if you’re with AAMI, you can consider a Business At Home policy, which combines Home and Business Insurance.
What’s included with an AAMI Business At Home policy?
These policies offer a variable set of coverage types that you may include depending on the type of business you run.
- A professional such as an accountant may require Public Liability Insurance to cover costs related to clients sustaining an injury while visiting their home office.
- Someone making homemade jam to sell online may require Products Liability Insurance in case their product inadvertently makes someone ill.
- A photographer with a home studio may require cover for Portable and Valuable Items in case their camera is damaged or stolen.
Of course, these are just a few examples. Every business is different, and we encourage you to consider the needs of yours. To discuss in a little more detail, give us a call on 13 22 44, or request a call back.
Is Business At Home Insurance just for home owners?
As with Home Insurance, you can consider taking out a Business At Home policy for Building Only or Contents Only. Of course, you can also get combined Home and Contents coverage, depending on your needs.
For example, a renter who runs a small business from home can select a Business At Home policy that includes Contents Insurance alongside those business-related coverage types that suit them.
Depending on your type of business, you may need special permits relating to zoning, signage, noise levels or health issues. If you’re renting, consider seeking approval from your landlord or property manager before kicking off your business activities from your rented property.
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- What insurance should I get for my small business?
- Do I need Public Liability Insurance?
Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 trading as AAMI (Home and Contents Insurance policies) and AAMI Business Insurance (Business Insurance policies).
This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. Read the relevant Product Disclosure Statement before buying this insurance. The Target Market Determination is also available.