Premises business insurance: what cover do you need?

Work from home, rent or own business premises? Learn what buildings, contents and business interruption insurance cover, and what to check before buying.

By Hugo Brooks1 October 20267 min read

Buildings, equipment and stock - what you need to check for business insurance

When you're starting a business, “premises insurance” can sound like something for people with shops, warehouses or their own office building.

But even if your business runs from a spare room, you may have a laptop, tools or stock that would be expensive to replace. And if you rent a workspace, the landlord's insurance may leave your belongings entirely up to you.

The starting point is simple: what do you rely on to work, what is already covered, and what would happen if you lost it?

This guide helps you work through those questions, whether you're at home, sharing an office or taking on your first premises.

Do you have to buy premises insurance?

Buildings and business contents insurance are not generally required by UK law. However, your lease or mortgage may require particular cover.

You also don't automatically need a new property policy just because you've incorporated. Start by checking your existing cover and the things your business actually owns or uses.

If you're working through insurance more broadly, our guide to what business insurance your company needs covers the other risks to consider.

Business insurance: what cover does your company need?

Your insurance needs start with your working situation.

Your situation	Your first check
Just you and a laptop at home	Does your home policy cover business equipment, and is the laptop covered when you take it out?
You keep products or tools at home	Does your policy cover business stock and equipment, at the values you need?
You use a coworking space	Does the operator cover your belongings, or only its own property?
You're renting your first workspace	What does the landlord insure, and what does your lease leave to you?
You own your business premises	Is the building insured for its full rebuilding cost?

Do you need insurance if its just you and a laptop?

If you work from home, ask your home insurer whether your business activities and equipment are covered. Explain what you do and whether customers visit.

An extension to your existing policy may be enough, or you may need separate business cover. GOV.UK's guidance on working from home explains why home insurance may leave gaps.

Think about where you work, too. A laptop insured at home may not be covered in a café, shared office or at a client's premises. Ask specifically about equipment you take out with you.

Insurance needs if you're keeping stock or tools at home?

A spare room full of products is different from a spare room with a desk. Check whether business stock is covered, and how much you would need to replace after a leak, fire or theft.

Use your busiest period when discussing stock levels. If you normally hold £2,000 of stock but increase that to £6,000 before Christmas, cover based only on the quieter months could fall short.

For tools, explain whether they stay at home or travel to jobs. Cover at one address may not include use elsewhere or time spent in a vehicle.

Do you need insurance if you use a co-working space?

Ask the operator what its insurance includes. The building and its furniture may be insured without your laptop or other belongings being covered.

If you work across several locations, tell your own insurer. Check that your cover reflects how you actually use the equipment.

Insured required for renting your first office, shop or workshop?

Read the insurance section of your lease before buying anything. The landlord often arranges buildings cover and may pass the cost on to tenants. Your own equipment and stock usually need separate attention.

Also check who covers improvements you've paid for, such as partitions, counters or a shop fit-out. Ask the landlord or broker to explain any responsibilities you don't understand.

Buying your own premises?

Buildings insurance becomes a separate decision when you own the property. A commercial mortgage lender may require it.

The amount insured should reflect what it would cost to rebuild, including relevant fees and site clearance. That is different from what you paid for the property or what you could sell it for. A specialist assessment can help you establish the figure.

Ask: What are you actually insuring?

“Premises insurance” is often used as shorthand for commercial property insurance. There are three parts worth understanding:

Buildings: the structure you work from.
Contents and stock: the equipment, furniture, tools and products inside it.
Business interruption: certain financial losses while a covered incident disrupts trading.

A policy may include some of these together. Check what you're buying rather than assuming the name means everything is included.

Replacing your equipment and stock

Contents cover can help pay for items damaged or stolen in circumstances covered by the policy.

Ask a straightforward question: “Would a claim pay for a new equivalent, or take the item's age and condition into account?”

That answer affects both the payout and how you calculate the amount to insure. A laptop's original purchase price or value in your accounts may not match what your policy requires. Stock is generally valued at cost, rather than its retail selling price.

Make a list of the things you would need to replace and ask the insurer or broker how to value them.

Keeping the business going

Imagine a leak damages your salon and you have to close for repairs. Replacing furniture helps, but it doesn't necessarily cover the income you lose while appointments are cancelled.

Business interruption insurance may help with lost profit or revenue and additional costs, such as working from temporary premises. What it pays depends on the policy.

Check what has to happen for cover to apply. Many policies require physical damage covered by the property insurance. They won't respond to every reason your business might stop trading.

Also ask how long payments can continue. Repairs, replacement equipment and rebuilding trade may take longer than simply reopening the doors. Your broker can help calculate the financial cover using the policy's definitions.

What should you ask before buying?

Once you know which cover is relevant, compare more than the price:

What events are covered? Ask about the risks that concern you, such as fire, flooding or theft.
Where does the cover apply? Include home, shared workspaces, client sites and storage where relevant.
What would we receive after a claim? Check the limits, how items are valued and the excess — the amount you pay towards a claim.
What do we have to do to stay covered? Ask about locks, alarms, theft conditions and periods when the premises are empty.
What if our insured values are too low? Some policies reduce a claim in proportion to the shortfall, even if the claim is below the overall limit.

You don't need to understand every insurance term before having that conversation. You do need to explain how your business works and get clear answers about what the policy will do.

Review it when something changes

The cover that fits a founder with one laptop may no longer fit a business with an office, employees and several thousand pounds of stock.

Review at renewal and when you move, buy expensive equipment, hold more stock or change what you do. Tell your insurer or broker about changes as required by the policy.

Keep your policy documents, equipment list and purchase records somewhere you can access if your usual workspace becomes unusable.

Getting help with the decision

You can buy directly from an insurer or use a broker. A broker may be useful if your lease is unclear, you have specialist equipment or you're unsure how much cover to arrange.

Have your lease, a list of equipment and stock, and a description of your working setup ready. Ask which insurers the broker considers, whether it charges a fee and how it is paid.

FOUNDRS can connect founders with our insurance partners, Price Forbes and Premierline, to discuss cover that fits their business.

Start with where you work and what you rely on. Check what's already covered, then explore any gaps that would be difficult for the business to fund itself.

This article provides general information; cover depends on the individual policy.