Do I need business insurance if I run my business from home?

Running a business from home can be very rewarding, both financially and in terms of lifestyle. Flexible hours, no sitting in traffic, reduced costs, the list goes on. Best of all, you can assume that everything is covered in your home and contents insurance, right? Wrong.

Running a business from home carries risks that aren’t necessarily covered under your home and contents policy. You may need business-specific insurance, such as:

• Public liability insurance. If you have customers or suppliers visiting, no matter how infrequently, this insurance offers protection against the small but serious risk that someone could injure themselves on your premises. Public liability insurance can also protect you if you’re found responsible for damage to their property.
• Business interruption insurance. AAMI calls this ‘Back in Business’ and it can cover your ongoing business costs when your business operations are interrupted, for example, as a result of damage to your property or burglary.
• Accidental injury insurance can help you cover medical bills, loss of income or other costs by paying out a lump sum for specific accidental injuries. This can be particularly important for business owners, who are not covered by workers compensation.
• Income protection can also help provide valuable financial support by covering part of your monthly remuneration or share of business income while you can’t work due to sickness or injury.
• Money insurance. If you get paid in cash, you can insure money itself against loss through burglary, armed hold-up or fire. The money may be in transit or at your premises. Check your policy for details.
• General property insurance. You can choose to cover valuable portable items (e.g., mobile phones and laptops) that you usually carry around with you in the course of your business. Even travel overseas may be covered, depending on the policy. It’s worth considering if you work from home but travel frequently.
• Machinery breakdown insurance. This insurance covers the breakdown of equipment, such as computers. If, for example, you run a catering business from home and your refrigeration unit breaks down, your policy could cover you for the resulting deterioration of your consumable stock.
• Tax audit insurance. You might not welcome an audit by the Australian Taxation Office, but at least you can take out a policy to help cover your accountant’s fees.