Guide To Working From Home

GSI's guide to...

Interestingly, working from home isn’t anything that’s entirely new. Prior to the latter 18th century, many people in the UK worked at home or in relatively close proximity to it. It’s the Industrial Revolution and the 19th century that leads to the development of the idea that going to work involves a journey to a factory or office for the majority.

By the 1970s, working from home was a comparative rarity but there were already the early signs of the potential for technology to change things. By the 1980s, the idea of “teleworking” was starting to take shape but it took the technological advances of the 1990s and the 21st century to make that practical for many.

Today, it really is possible to run a business from your home. Many do and appreciate the numerous advantages of doing so.

You’ll need to identify a business opportunity and show it to be viable. You’ll also need to put everything into place around your home/workplace to provide you with a viable working environment – and that can be a little tougher than it at first sounds.

That’s why we’ve developed this brief guide to help you to consider some of the major stepping stones involved including, as you might expect, some that relate to insurance.

Specifically, we’ll outline:

Why work from home?

For some, the attractions of working from home come immediately to mind:

flexible hours;
home comforts;
no office politics;
no commuting (fewer crack-of-dawn starts);
bosses or colleagues not looking over your shoulder;
dress codes and conventions of your choice;

These are all very real potential benefits and cited by many as reasons why they prefer working at or from home.

In passing, it’s worth noting that there’s an important difference between working ‘at’ or ‘from’ home. The former normally implies that you’ll spend the majority of your working time at home. The latter may suggest that it’s just your business base and that you’ll still spend a lot of time out-and-about conducting your business.

It’s also important to recognise that you can quite accidentally drift into working from home without even knowing it. Examples include letting out a room to a student or selling crafts at weekends. These types of activities may classify your home as a workplace and that might involve legal, insurance and registration issues.

However, from the point of view of balance for those thinking about this move for the first time as a career move, it’s worth keeping a little perspective. That’s because some of the above benefits can have an unanticipated ‘flip side’ including:

a lack of social company during the day leading to professional isolation and loneliness;
difficulties in segmenting your personal and professional lives – one example might be the loss of that special “I’m home” feeling when returning at the end of a working day;
dropping off the grapevine of information and rumour;
interruptions to your work routine from domestic events (children, partners, pets, visits from neighbours, TV distractions etc.);
diminution of your social interaction skills, as you’re spending more time alone.

Not all of these are risks for everyone.

However, if you’re a naturally gregarious person who enjoys office banter, social interaction and camaraderie, working at home can bring with it some things to be considered. These are all matters to be taken into account in terms of a self-analysis of what makes you tick and also just how suitable for home working your home and social environment actually is.

Costs

Working from home can have very significant cost attractions, including:

elimination of commuting costs;
more time spent productively working rather than sitting on trains or in cars commuting;
no office clothes wardrobe to be purchased and updated;
lower cost eating;
no premises rental costs if you’re self-employed;
some possible tax allowances (though these are complex and on the whole reducing).

Against this, it would be prudent to take into account some additional costs you might incur when working at home over a central office:

heating;
electricity;

There are many good reasons why working at home might prove a huge advantage and opportunity for many. Always make sure though that you’ve thought about the situation overall and have done your sums too.

Why standard home insurance won’t cover you

It’s a fairly safe bet that when you’re making your initial plans for the transition to working from home, insurance probably won’t be one of the first thoughts that springs to mind. Instead you’ll be concentrating on the excitement of ‘making it happen’ and developing your business plans accordingly.

On top of that, you probably have insurance in place covering your property and its contents already. So, why should working from home affect that?

It’s therefore sometimes a surprise to discover that your standard home insurance might become invalid in part (or perhaps entirely) the moment you start using your home as your place of work. If that sounds harsh, it’s worth thinking about the issues.

A typical home insurance policy covers your property and its contents against a variety of risks. Your insurance provider will understand the probable nature of those risks based upon the characteristics of a residential property. They might include things such as:

used almost exclusively by you, your family and friends, for social and recreational purposes;
commercial work conducted on the property is very limited – typically work brought home in the evening from your normal place of work;
commercial visitors will be few in number typically including tradespeople or those working for utility companies etc. However, you typically won’t have customers calling to see you for the purposes of conducting business;
you won’t have commercial machinery operating on site or extensive IT equipment operating for commercial purposes.

Why that matters

Once you start working at or from home, your risk profile changes.

Although it might not apply in every case, one or more of the following may arise:

the nature and type of your IT equipment may change – perhaps including more expensive items. For insurance providers, this needs to be considered from both a theft and destruction (e.g. fire) viewpoint;
you’re going to be spending longer around the house and engaging in business activities while you do so. The risk of accidents increases;
if you have more visitors as a result of your commercial activities, there’s a much greater chance someone could get injured on your property and hold you accountable. If they sue and win their case under public liability provisions, the damages awarded against you might be very substantial because it was a professional not personal context;
you might be storing materials and goods on your property and perhaps running other forms of machinery (e.g. printers, lathes, packing machines) to support your business activities. The risk of accidents and damage to your property and its contents increases.

This is just a summary of the many reasons why insurance providers will typically require you to at least notify them if you’re planning to start working from home and why in many cases, they may decline to cover your activities and changed status unless you take up some form of working from home insurance protection.

What working insurance covers

It’s difficult to be prescriptive about what working from home insurance should or should not include.

Your business will be unique to you as will its risk profile. So, a solution that’s suitable for someone else might not be a good fit for you.

There are though, certain elements that it perhaps should consider, subject to the size and nature of your business:

office contents and IT equipment;
This is important if your business is associated with retailing (physical or online) or if you hold parts for servicing, maintenance and repairs. Don’t forget, typically these things will not be covered by standard household policies;
employer’s liability. This is a legal requirement and it’s not optional if you employ staff. Do remember that the law, in the event of an injury, may interpret people on your property as ‘staff’ even if they’re relatives or friends helping out without payment or a contract of employment;
business funds. You might need this type of cover if you hold lots of cash or cheques from customer payments. Some policies may cover you for the theft of such funds or their accidental destruction but you may need to invest in a safe as well;
business interruption. There may be circumstances, for example a fire, that prevent you from running your business for a period of time. Some policies may be able to offer you financial help in such situations;
professional / product liability. If one of your customers suffers injury or loss due to something you have manufactured or a service you have provided, they may sure you for compensation;
enhanced public liability cover. This might be required because business visitors to your property might be far more inclined to sue you if they suffer injuries on your property than would a friend or family member – and we live in an increasingly litigious world.

Of course, unless you’re an insurance professional, it might be unlikely that you’ll be able to identify how the precise nature of your planned business activities might influence your insurance needs. That’s why it usually makes sense to discuss your overall position with an experienced provider of business from home insurance such as us at GSI Insurance.

Top tips on working from home

Here are some ideas to help you to get started:

do your homework. Successful home businesses don’t just happen because someone started working at home – they need a business plan and a proposition your customers will be interested in buying. In that sense, they’re no different to any other business;
research what you’ll need as basic foundation stones. This includes the IT equipment you’ll require, your insurance position and any mandatory legal registrations you’ll require (e.g. be sure you understand local laws relating to ‘change of property use’ provisions);
if you have a mortgage, make sure that there are no restrictive conditions relating to use of the property for business purposes. Contact your mortgage provider for clarity if you have any doubts;
be certain your local telecoms infrastructure can support your enterprise. This is becoming less of a problem each year but there are still areas where broadband and WIFI is limited or slow. It doesn’t matter how good your own IT kit is, if the local infrastructure is poor then it might severely impact you;
physically segment, if at all possible, your business area from the rest of your home. This is important for your own mind set and that of others around your house;
emotionally segment your work spaces. That’s partly for you and your focus/concentration but it’s also important to communicate to others around you that you’re working ‘in there’ and not to be disturbed every five minutes. This can be an issue and cause upset – so handle it delicately but positively;
set up separate email, social media and phone lines to make sure your business and private activities don’t get muddled. Today this is usually easy and low or even zero cost;
consider any issues that might annoy your neighbours. A previously quiet cul-de-sac, which suddenly becomes a hive of activity during the day with vans delivering to and collecting from your home address, may cause friction. Consulting them in advance with a smile is always better than an angry confrontation and recriminations after the event;
set yourself ‘going home’ times. It can be very easy for your business life to entirely subsume your private life when you work from home and that’s going to be bad for your relationships and family – plus your own stress levels. So, make a point of ‘going home’ even if it only involves walking through a door and then don’t go back until the next day;
linked to the above, switch your business phones off at night. Don’t try and run a 24×7 business because you’ll burn out – and fast;
as part of the same theme – set yourself a start time too. Many people working from home will admit it can be very difficult to get going with so many other comforts and distractions around;
think about noise and neighbours. This is critically important if you live in a terraced or semi-detached property. That printing machine (etc.) might sound unacceptably loud to your neighbour with a baby if you have it going 8 hours a day;
remember your personal security. Nobody wishes to encourage paranoia but there is a significant difference between asking a stranger to “pop in and see me” when you’re in a large office to doing the same when you’re alone at home. This is obviously a particular issue if you’re a female working at home alone or someone with higher value items for sale. Verify identities in advance, keep records and consider a personal alarm;
discourage casual visitors by restricting information on your full business address. This is partly a security issue but also to avoid salespeople turning up entirely unexpectedly and making a nuisance of themselves – which they will, given half a chance. Sometimes serviced mail addresses, something like a PO Box, can be useful;
make a point of taking a firm lunch break, which gets you away from your work. Don’t get into the habit of eating a quick bite every day while you continue working. It’s bad for your health;
try to make a point of regularly getting out of your home to meet and engage with others. This is one of the hardest things to replace when you leave conventional factories, workshops and offices to start working from home. If you’re not careful, you may find yourself becoming a little ‘housebound’;
comply with local health and safety laws. For example, some types of printing or dying chemicals, welding equipment and so on, may be prohibited from storage and use in residential properties. You can check with the local fire service and local council health and safety personnel. You should also be very sure you declare any such items to your insurance providers;
consult an accountant. This is good practice for a start-up business anyway but they may be able to help you with any working-at-home tax and capital allowances;
don’t get people working for you on an unofficial basis. In some cases this might be illegal and in others, dangerous in terms of employer’s liability cover shortfalls. If you need to employ people, do so officially;
equip yourself comfortably. Working on the edge of your bed or sitting on a box might be a fond memory of your student days but it won’t be conducive to productivity and innovation in a business. So, be prepared to spend a little on your own comfort.

Summary

Millions of people in the UK work happily and successfully from home.

Many forecasters argue that this is the future for working practices and based on what’s happened in the last 10 years, it’s hard to argue with them.

Even so, working from home isn’t without its challenges and these need to be recognised and then dealt with. It’s usually a good idea to deal with such start-up issues in advance because once you’ve made the transition, particularly if that involves starting a new business, your attention should be focussed on success rather than the admin and logistical issues associated with a home base.

It’s also worth concluding with a word about the need to take your loved ones with you on this transition. In many respects, home working can be hugely beneficial for them and you in terms of your relationships and quality family time. Even so, the support and discipline of other people in your home can help make working from home a success or they can cause it to be traumatic.

So, consult with them at the earliest stages and incorporate their needs and views, where possible, into your plans and working practices.

Good luck!

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