The ABC recently ran a story about a family in Victoria who lost their home in a fire and, due to a hobby farmgate stall, had their home insurance policy voided. Since then, the news agency has had multiple reports of people across the country whose home insurance was voided or cancelled because of their home business.

So, what are the exclusions or policy wording pieces to look out for in home insurance to look out for, and what do people who are working from home – which is rising during the current flu and Covid-19 outbreaks – need to be mindful of?

For those who work from home for an employer, you can breathe a sigh of relief – it’s unlikely that working from home duties will void your insurance. However, if you have an ABN registered to your address, it is worth checking your policy documents or with your broker.

The ABC spoke with a principal lawyer at Maurice Blackburn Lawyers, who said there was a difference between running a business from home and working from home for an employer.

“If you’re working for an employer, you’re not usually going to be engaging in what the insurer might regard as business activity,.”

“That’s different if say you are running a business for which you’ve registered an ABN.”

Standard practice throughout the insurance industry is to ask the person taking out the policy whether they conduct business activity at the address for which the policy is intended, which is used to determine the level of risk for the insurer.

“Every insurer differs in terms of the products they offer and the risk they’re prepared to take on.”

With the rise of side hustles and micro businesses, it is always worth checking with your insurer. Managing lawyer at the Consumer Action Law Centre, Phillipa Heir, explained that “insurers generally have moved with the times in terms of people working from home.”

“Insurers will often not take into account home offices as a risk that they’re not willing to insure.”

However, she noted that “each insurer approaches these sorts of things differently” and consumers should always check with their insurer.

One of the main issues, and which was applied to the farmgate family, was the failure to disclose. Insurers require you, whether you’re taking out a new policy or renewing a policy, to take reasonable care not to misrepresent them. Failing to do so can lead to the insurance being voided, but the impetus to determine whether the information is important lies with the insurer.

“In order to decline a claim down the track, they have to show that they wouldn’t have offered you any cover had they known of the particular circumstances of the business,” Ms Heir said.

The Insurance Council of Australia has echoed this, emphasising the importance of being transparent with your insurer about any business being conducted at the property.

“When you purchase or renew insurance your insurer will ask you to disclose a range of information relevant to the policy including whether any business or commercial activity, no matter the size or type, will be conducted at the property,” a spokesperson said.

Published On: July 22nd, 2022 / Categories: News /

Subscribe To Receive The Latest News

Get the latest industry news direct to your inbox

Thank you for your message. It has been sent.
There was an error trying to send your message. Please try again later.

View our Privacy Policy here.