For more on this part of the insurance industry:
Home-based business insurance is a financial safeguard for anyone who runs commercial or income-generating activities that operate mainly from a person’s home. This includes:
There are over millions of people in the UK working from home, many of whom are running part-time or full-time businesses. Without the right insurance, one unexpected incident could wipe out their income.
After a person’s home studio was ransacked by thieves, thousands of pounds worth of equipment was stolen. They had no way to replace their tools or recover lost work.
For home-based businesses, even a single break-in can shut things down for weeks. Insurance is there to help owners get back on their feet.
More people now run digital services from home, so insurers are updating cover to include sheds, garages, and other non-traditional workspaces.
Online platforms have also turned hobbies into income, and brokers are now offering flexible cover that grows with the business. But there are concerns that brokers need to be aware of:
Homemade goods like candles or food can cause harm if something goes wrong, yet many sellers have no liability cover. Regular courier visits also raise the danger of accidents at home.
Anyone running a business from home needs more than their usual home insurance. Home-based business insurance covers business tools, customer visits, and legal claims.
The right cover depends on what the business does, who visits, and what’s being sold. Even part-time or low-income work from home can carry risks that need protection.
Cover can change based on the type of business. Here are some common options:
Some policies also cover goods in transit or gear taken off-site. Brokers can help find cover that fits what the business really needs.
Yes, in most cases. Standard home insurance does not cover business tools, stock, or customer visits.
Anyone running a business from home should tell their insurer. If they don’t, claims may be refused and the policy could become invalid.
Home-based businesses carry more hazards, like client visits or storing goods. That’s why they often need different insurance.
Yes, but it’s not automatic. Anyone with a mortgage must check their terms before starting a business from home.
Most lenders ask to be told if the property is used for business. Some may need written permission, especially if the business involves:
Running a home-based business without approval could break the mortgage agreement. It may also affect insurance if the lender was not informed.
Yes, most people running a business from home need to register. This depends on how the business is set up and what it does.
Anyone earning money through self-employment must register with HMRC as a sole trader or limited company. This is required even for small businesses or part-time income.
Registration helps with tax reporting and proves the business is legal. It also supports claims for business costs and getting proper home-based business insurance.
It can, but not always. Most home-based businesses do not pay more council tax if the space is also used for living.
Extra council tax may apply if part of the home is used only for business. Local councils or the Valuation Office Agency decide if this applies.
Examples include converting a room into a salon or using an outbuilding full-time. If business use is clear and regular, a separate business rate may be added.
Brokers should remind clients that if part of the home is classed as business use, proper home-based business insurance may also be needed.
