Anyone who works from home or runs a type of business from home is likely to have a significant number of items that they would classify as their personal possessions. These may be items that are normally considered domestic or purely for domestic use, or maybe part of the business work that they do from home or may well be both. The reason this issue is important is that from an insurance point of view, personal possessions are normally covered under a standard homeowners policy which is likely to exclude any type of work or business that is carried out from under the home.

For many people the use of a computer and internet provision is a standard part of their home that they may well use for domestic purposes and/or business use or both. An insurance company will recognise this but my still impose conditions on what they perceive to be digital information devices.

For many people this will be an area that is distinctly grey in terms of boundaries as to the nature of the device, and whether it is used for work or home or both. With the advent of tablets and smartphones this line will come even more blurred.

Traditionally a home insurance policy would cover what are referred to as personal possessions or contents, I.e. the possessions in your home. There are likely to be restrictions on the cost of replacing certain items, some items will be deemed to be high risk and insurable only with special permission. Other items may be insured on an all this basis and may be taken outside the home, possibly with certain restrictions.

This may seem a slightly complicated issue, and many people may simply ignore it and hope that it will never be an issue if a claim arises. Many people take this approach to insurance generally, but it is fraught with dangers.

Depending on the nature of the business and what items are shared between domestic and business use, it can potentially be very damaging financially in the event of a claim needing to be made under the policy.

A much better approach is when taking out the insurance policy to advise the insurance company specifically of all possessions that need to be insured under the policy. In addition make clear to the insurance company and seek their approval for the fact that a number of items are either exclusively for business use or are shared between domestic and business work that is carried out at home.

If a business has a number of specific items of its own or any stock that is purely business orientated then this should be spelt out in the proposal form is well. It is advisable to let the insurance company know in full about the nature of the business that is carried out at home, and seek their agreement or not to insure it as the case may be. The insurance company may well argue that they want a separate business insurance policy taken out that covers certain items or possessions or stock that they deem not to be a suitable risk for a home insurance policy.

Author's Bio: 

Peter Main is freelance writer who has spent almost twenty years in the insurance industry, working at Lloyd's of London. He writes extensively about home insurance and in particular about how home insurance works in covering buildings, contents, identity theft, liability, and garden and lawn machinery such as garden tractors, snow blowers etc.