Usually yes for an employee, and often no for a business. Most home and contents policies treat an employee working from home at a desk as ordinary household use, so a laptop, monitor and chair that you own are insured like any other contents. Equipment your employer owns is generally theirs to insure. Once you run a business from the house, many wordings cap or exclude business equipment, stock, and liability to clients or couriers who visit, so the policy needs to be told and often extended.
The employee case: what changes and what does not
If you are employed by someone else and spend some or all of the week working from the spare room, the insurer’s main concern is the same as it was before: the house, the people in it and the belongings inside. A desk, a second screen and the laptop you bought yourself sit inside the contents sum insured. A fire or burglary that takes them is claimed like any other contents loss.
Two things do change. The first is who owns what. A laptop, phone or docking station supplied by your employer is the employer’s property, and most home policies either exclude items you do not own or cover them only up to a small limit. Ask your employer how its own policy treats equipment kept at staff homes. The second is value. Home offices fill up with gear over a couple of years, and Moneysmart’s contents insurance guidance is to list belongings room by room at today’s replacement prices. Do the office as its own room.
There is no single home insurance working from home rule
Each insurer draws its own line, and it sits in the product disclosure statement under a heading such as business use, home business or business activities. Moneysmart points to the Key Facts Sheet and the PDS as the documents to compare, and the business definition lives there, not in the brochure. Some policies say that clerical work for an employer is not business use at all. Others allow it but set a separate, lower limit for anything described as business equipment, or for tools of trade. A few ask you to declare any work from home when you take out the policy.
Read for three words: business, trade and profession. Wherever they appear, note whether the clause is an exclusion, a sub-limit or a disclosure condition. The three behave very differently at claim time.
Running a business from home is a different risk
A sole trader making cakes from the kitchen, a consultant seeing clients in the front room, an online seller with a garage full of stock: these are businesses that happen to be at a residential address, and a home policy was not priced for them. The common gaps:
- Stock and materials, which most home wordings either exclude or cap at a modest figure.
- Business equipment above the policy’s business limit, including specialist tools, commercial kitchen gear and anything on lease.
- Liability to people who come to the house for the business, such as clients, students, delivery drivers and contractors.
- Lost income while the house is uninhabitable after a fire or storm. A home policy pays for temporary accommodation, not for the trading you could not do.
- Money, whether cash on hand or electronic funds transfer fraud.
- Claims that arise from the work itself, such as advice that turns out to be wrong or a product that injures someone.
These are the sections a business pack is built from. Home based businesses often need a small one: contents and stock at the home address, a liability section, and sometimes business interruption, written alongside the home policy rather than instead of it.
Laptops, data and the equipment that leaves the house
Contents cover generally applies inside the home. Moneysmart describes portable contents cover as an optional extension for items such as a laptop, tablet or phone taken outside the house, usually with a per-item cap and a list of what qualifies. If you carry work equipment between home, the office and client sites, check whether that extension is on the policy and whether the cap reaches the value of the bag you carry.
Data is a separate question. A home policy replaces the laptop. It does not deal with a compromised email account, a ransom demand or the cost of telling customers their details were exposed. For an employee, that is the employer’s problem and the employer’s cyber insurance. For a home based business holding customer records or taking payments online, it is your problem, and it needs its own cover.
Visitors, couriers and the liability question
The legal liability section of a contents policy is one of its most useful parts. Moneysmart notes that even people with few belongings may want contents insurance for the liability cover alone, because it responds when you are found legally responsible for injury to another person or damage to their property. The catch is that many wordings limit that cover to liability arising from your occupation of the home as a private residence.
A friend who trips on the front step is one thing. A client who trips on the same step on the way to a consultation is a business visitor, and the insurer may say the loss arose from the business, not from occupying the home. If people come to the house for work, or you work at their premises, a public liability policy in the business’s name is the clean answer.
Disclosure, and the tax line the ATO draws
Tell the insurer. Most home insurance working from home enquiries from employees end with a quick note on the file. A business at the address is a change in the risk, and an undisclosed business is the kind of fact an insurer raises when a large claim lands.
On tax, keep insurance and deductions separate in your head. The ATO’s guidance on home based business expenses describes a home based business as one where an area of the home is set aside and used exclusively as a place of business, and it lists house insurance premiums among the occupancy expenses of which a business portion may be claimable in that situation. The same guidance flags capital gains tax consequences when a home used for business is later sold. Those are questions for your accountant. The insurer’s question is simpler: what happens at the address, who comes to it and what is kept there.
What FRS does: we read the business use clause of your current home policy and tell you in plain terms whether the work you do from home sits inside it. Where it does not, we place the smallest business cover that closes the gap, usually contents, stock and liability at the home address, and keep it aligned with the home policy so neither insurer can point at the other.
If you work from home and want the wording checked, start with our home and contents insurance page and send us the PDS you hold.
Frequently asked questions
Do I need to tell my home insurer that I work from home?
Yes. If you are an employee doing office work, most insurers note it and nothing changes. If you run a business from the house, it is a change in the risk and some policies treat non-disclosure as grounds to reduce or decline a claim. A short call before a loss avoids a long argument after one.
Is my employer's laptop covered by my contents insurance?
Often not, or only up to a small limit, because most home policies insure items you own. Equipment issued by an employer is generally insured under the employer’s own business policy. Ask your employer to confirm that before you rely on your home policy, and keep your own equipment listed in your contents sum insured.
Does home insurance cover clients who visit my home office?
Not reliably. The liability section of a home and contents policy is written around occupying the home as a private residence, and many wordings exclude liability that arises from a business run at the address. If clients, students or contractors come to the house for work, a public liability policy in the business name is the safer route.
Can I insure a small home business on my home policy instead?
Sometimes, for very small operations. Some insurers offer a home business extension that lifts the business equipment limit and adds basic liability. Once there is stock, staff, visitors or income that depends on the premises, a small business pack written alongside the home policy usually gives better defined cover and avoids two insurers disputing which one responds.
