Cash clinic: Insurance cover for working at home is not straightforward

Q WHERE can I get "normal" household insurance, such as buildings and contents with accidental damage cover, which allows for my husband's business activities at home? He has occasional clients visiting the house and I can't find any insurance company prepared to provide accidental damage cover.

My husband is a tax adviser, his visiting clients are almost all well know to him and surely a lesser risk of causing accidental damage than my teenage son, his friends, my dog and two cats! Unlike households which may be unoccupied during working hours, my home rarely is, which suggests to me a lesser risk of burglary. I'm sure many householders have similar circumstances, and I would welcome your comments.

PD, Edinburgh

A Online and telesales insurers are not generally geared up to provide quotes other than for what might be considered standard risks, despite the trend towards home-working that has developed over the past 25 years.

Competition is fiercely price driven within fairly strict parameters so there's little margin for the inclusion of additional covers or features. The market has moved from responding to customer need to offering packages to cover the most common situations with little flexibility for bespoke tailoring.

It's driven by the system rather than by the customer.

Many household policies still exclude any cover in respect of property or equipment used for business purposes even though it may belong to the policyholder personally.

The insurers' perception is that there is an increased risk of damage caused by additional and more frequent visitors to the property and the extra public liability risk should a visitor be injured or suffer some loss or damage to their property or effects. In today's litigious climate it's too easy to find yourself on the wrong end of a lawsuit.

There's no reason why an insurer can't provide accidental cover on the buildings and contents in this situation – it should only take a broker to present the situation in a manner that enables them to assess and price the risk appropriately and to issue documentation that accurately reflects the cover required and agreed.

Several established general insurers, including Allianz, Aviva and Axa, have developed "office at home" policies which cover the business risks of someone who operates their business from home. The cover dovetails with the household cover that they offer and provides the necessary property, liability, business interruption and other covers for the business.

They are more likely to look sympathetically on a risk in your circumstances.

The use of an insurance broker may be considered old-fashioned but this is a good example of a problem which can be solved by having a working relationship with a market professional and less risk of omitting any salient issues. Many people who work from home may not have considered the insurance implications at all, and you should also check the terms of your mortgage and title deeds in case they prohibit home working.

• The answer was prepared jointly by Douglas Hunter, partner at HBJ Gateley Wareing, and Euan Drysdale of Keegan and Pennykid Insurance Brokers Ltd

If you have a question you need answered, write to Jeff Salway, Personal Finance Editor, The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or e-mail: [email protected].

This above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given. The Scotsman Publications Ltd and HBJ Gateley Wareing accept no liability on the basis of this article.