As more people run businesses from home or work for themselves, the line between personal and commercial cover can feel increasingly blurred. Standard home insurance and commercial property insurance may sound similar, but they protect very different things. Knowing which one you need, and when, can prevent costly gaps in cover.
Below, we break down the key differences and answer common questions around when commercial insurance becomes necessary.
What’s the Difference Between Regular Home Insurance and Commercial Property Insurance?
“Regular” insurance usually refers to home insurance (or renters insurance, if you’re a tenant). This type of policy is designed to protect your personal residence, belongings, and day-to-day risks within a home environment.
Commercial property insurance, however, is designed for business activity. Whether you’re self-employed, running a small retail space, or managing multiple business premises, it protects business assets, stock, equipment, and the property itself.
| Feature / Coverage | Home Insurance | Commercial Property Insurance |
| Purpose | Protects personal residence and belongings | Protects business buildings, stock, and equipment |
| Typical Customer | Homeowners, renters | Businesses, commercial landlords, sole traders |
| Covers Building Damage | Yes, for residential risks | Yes, often across multiple or specialised properties |
| Covers Contents | Personal belongings | Business equipment, tools, inventory |
| Liability Cover | Personal liability | Public, employer’s, and business-related liabilities |
| Business Equipment | Limited or excluded | Fully covered to business limits |
| Business Interruption | Not included | Often included (loss of income) |
| Specialist Risks | Not included | May include stock damage, equipment breakdown, cyber risks |
| Typical Cost | Lower | Higher due to broader risk exposure |
Is Commercial Insurance Worth It?
Commercial property insurance is worth considering if you rely on business assets or premises to earn an income.
Home insurance rarely covers:
- Business stock
- Specialist tools or equipment
- Professional or public liability
- Loss of income after damage
- Risks tied specifically to running a business
Insurers and legal advisers (such as Nis Insurance, Jensten Insurance, and Raziner Law) consistently highlight that failing to declare business use can invalidate home insurance claims. For many self-employed or home-based workers, commercial cover offers the protection needed to keep their business running after an unexpected event.
Do I Need Commercial Property Insurance if I’m Self-Employed?
If your self-employment relies on tools, equipment, or stock, or if clients visit your workspace, commercial property insurance is often necessary.
Examples of situations where you may need it:
- You keep professional tools or materials at home
- You use specialised equipment (e.g., cameras, machinery, salon tools)
- Your business assets are more valuable than a small laptop and phone
- You’d be financially impacted if your workspace became unusable
Even as a sole trader, the value of your business assets can quickly exceed what home insurance is designed to protect.
Do I Need Commercial Property Insurance if I Run a Business From Home?
Running a business from home requires a careful look at what your insurance actually covers.
When home insurance is not enough
You may need commercial property insurance if you:
- Keep business stock or inventory at home
- Store high-value tools or specialist equipment
- Manufacture or produce goods in your property
- Have customers or clients visiting your home
- Would lose income if a fire, leak, or theft stopped you from working
When home insurance may be adequate
You may not need a commercial policy if you:
- Work remotely for an employer
- Use only minimal, low-value equipment (e.g., a standard laptop)
- Don’t store any business stock
- Don’t see clients at your home
Even in these cases, it’s still important to inform your insurer that you work from home so you remain adequately covered.
Real-Life Scenarios: What Actually Happens?
Scenario 1: Damaged Business Equipment
A photographer keeps £5,000 of camera gear in a home office. A leak from an upstairs bathroom damages the equipment.
- Home insurance: May decline the claim because the items are used for business.
- Commercial insurance: Typically covers repair or replacement.
Scenario 2: Home-Based Retail Stock
A small skincare brand stores hundreds of pounds’ worth of handmade stock at home. A fire damages the goods and production space.
- Home insurance: Unlikely to cover stock or the increased risk associated with product manufacturing.
- Commercial insurance: Designed to handle precisely this type of loss, including potential business interruption.
The Bottom Line
If your home is also your place of work, reviewing your cover now can prevent expensive surprises later. If you are looking to explore cover options, QuoteSearcher can help connect you with different insurance providers to compare quotes and find the one that works best for you.
