Insurance - Got You Covered?

Running a business from home could void your home insurance or lead to claims being denied.

Recent reports have highlighted instances of people having their home insurance contracts voided and claims denied, due to running home based business or “side hustles”.

These cases include:

  • A Torquay resident who does bicycle servicing and repairs in his garage – Insurance contract voided.
  • A couple who parked (whilst not in use) their mobile food service van on their front lawn – Insurance contract voided.
  • A regional couple who sold eggs from an “honesty box” at the end of their driveway – Insurance claim denied when their house burnt down.

In each case, the relevant insurance company said that they had not been made aware of the home based businesses, which on their interpretation, substantially altered the risk profile of the properties, under what were essentially domestic insurance policies.

The Torquay resident had separate insurance to cover his business activity, the food service van couple only parked the van at their property and did not cook or prepare food there and the rural couple took eggs from their fowl house to a hutch at the farm gate and the so called business did not involve their house at all. Notwithstanding the facts in each case, the insurance companies took a “hard line”!

Based on these recent cases, we strongly urge all clients operating business and income generating hobbies from home, to carefully check their insurance policies and contact their insurers to make sure that the appropriate disclosures have been made.

Even if you just have a business or entity registered to your home and may not actually be carrying on the business activity there, check anyway!  The “fine print” is often what catches people out and provides insurers with the opportunity to say they were not fully informed about the “risk” of the situation, resulting in policy cancellation or denial of liability for a claim.

If you have any questions at all regarding the article above please do not hesitate to contact your usual hmh Advisor on +61 3 9840 2200.