Have you ever wondered what could happen if your business activities aren’t covered by your current home insurance policy?

Running a business from home can obviously be super rewarding. You can skip the commute (which we know is rough in any CBD in Australia, particularly Sydney and Melbourne), set your own hours, and enjoy a comfortable working environment. That being said...have you considered how this setup might affect your insurance coverage? If you’re thinking, “My home insurance has me covered", you might be in for a surprise.

What does your home insurance really cover?

Most standard home and contents insurance policies don’t extend to business activities. This means that if something happens e.g. like a client getting injured on your property or your business equipment being damaged—your policy might not pay out.

For example, business.gov.au highlights that your home insurance likely won’t cover tools, inventory, or liability issues connected to your business. Imagine trying to explain to your insurer that your work laptop was stolen and being told it’s not covered because it’s “business-related.” Obviously very frustrating, right?

Types of insurance you might need

If you’re serious about protecting your business, there are a few types of insurance worth considering. Here’s what many home-based businesses in Australia invest in:

1. Public Liability Insurance: Covers legal costs and compensation if someone gets hurt or their property is damaged while visiting your business premises. If you meet clients at home, this is an absolute must. It's quite common for a lot of tradies to have public liability insurance, but also may be worth it for you depending on your industry. Learn more about public liability insurance here.
2. Professional Indemnity Insurance: Protects against claims of negligence or mistakes in your services. This is especially relevant for consultants and freelancers who work from home. Explore professional indemnity insurance here.
3. Business Property Insurance: Covers business-related equipment or stock in case of theft or damage. Your home insurance won’t cover this since, as we mentioned before, this is not related to theft about goods in your home but goods for your business.
4. Workers’ Compensation Insurance: If you have employees working from your home, this is legally required in most states.

You can also check out Small Business Insurance Packages for more tailored solutions.

What happens if you don’t have the right insurance?

Without proper coverage, you’re exposing yourself to significant risks. Here are just a few scenarios:

1. A client trips on your stairs during a visit and sues you for medical expenses.
2. A fire destroys your home office and your expensive equipment is uninsured.
3. Your inventory is stolen, and your home insurance refuses to cover it.

These are all very real possibilities, and they could lead to costly outcomes if you’re not prepared.

How do Australian laws and regulations come into play?

Australia has specific rules for home-based businesses that vary by state and local council. For example, if your business causes increased traffic, noise, or requires modifications to your home, you may need council approval. Find out more about council regulations here.

Ignoring these requirements can lead to fines or issues with your insurance coverage. If your insurer finds out you didn’t disclose your business activities, they could void your claim entirely.

How can you get the right coverage?

Getting the right insurance doesn’t have to be complicated. At Midland Insurance, we specialise in tailoring policies to fit the needs of home-based businesses. Our team will work with you to identify potential risks and ensure you’re covered where it matters most.

Get in touch with us to discuss your options or learn more about our Business Interruption Insurance, which can protect you from unexpected income loss.

Don’t leave your business exposed—find out how we can help safeguard your livelihood today.