Working from home? Insure your assets!
March 2011The dream of being able to wear your slippers to work is becoming a reality for many people throughout South Africa, as more and more are turning their homes' spare rooms into offices.
A study undertaken by an insurer in the UK has shown that one-fifth of homeowners are considering starting their own business and working from home - a show of ingenuity in tougher economic times.
"While some of the respondents in the survey were concerned about having to choose this type of employment option, almost one-quarter said that working from home would be the ideal situation for them as it would allow them to combine their home life commitments with work," says Martin Janse Van Rensburg, spokesperson for Budget Insurance Brokers.
The advantages of running a business from home are clear. A home-based business enables you to immediately remove a large amount of cost and risk as you are able to use existing rooms, electricity, an existing phone and Internet access.
While working from home can seriously simplify one's life, Budget Insurance Brokers says that it is vitally important for prospective home workers to check with their home insurance provider to confirm that they are covered if they decide to launch a business from the comfort of their home.
"This becomes especially relevant if you are considering bringing in new equipment or employing additional staff to work on the premises," advises Janse Van Rensburg.
He adds: "If you are working from home, you should contact your insurer and make sure that any additional items of work equipment are added to your existing cover and insured for business use."
Home contents insurance covers the policyholder and their immediate family that resides with them; however, if an employee is operating from the household during the day, it is important to inform your insurer immediately.
Many home contents policies may have restrictions on assets owned by your home business, like home computers, so it is best to check your existing policy and notify your insurer if you are unsure.
In terms of buildings insurance, while most businesses should not have any effect on the cover or cost of it, it is better to alert your insurer to the new circumstances upfront rather than waiting until you have to make a claim.
Another insurance aspect to consider is that of your vehicle. Individuals who work from home often overlook if their car insurance allows them to drive for business purposes. If you rely on your personal vehicle to conduct business, you need to be insured for full business use, e.g. if you are a sales representative or financial consultant who visits clients away from your office at home.
"There are many advantages of being your own boss, foremost of which is the fact that you are in control of your own destiny," Janse Van Rensburg concludes. "By being proactive about your insurance needs, you can ensure that worrying about your precious, hard-won assets does not become your focus, leaving you to make the leap to full self-employment with one less worry."
