Office insurance cover for a coworking space

The rise of the sharing economy has led to people sharing lifts, gadgets and even space in their home in a bid to economise and capitalise on a variety of opportunities. Airbnb, JustPark, Fat Llama and Liftshare are just some of the examples of sharing economy platforms that connect people to this collaborative market, allowing individuals to earn a bit of extra cash from property they own or services they can provide.

It’s no surprise then that the working world is following suit. Coworking is on the rise with many people choosing to share their workspace, whether it’s an office, shop or creative hub. Major high street retailers are renting out space in store and business owners are taking advantage of networking and collaboration opportunities that shared spaces present using enterprises such as AppearHere to promote their products.

XYZ is just one of the latest coworking initiatives to open its doors and encourage collaboration of likeminded entrepreneurs by offering flexible, short-term space. Prior to opening, nearly all of its space had been fully let with dedicated areas to encourage collaboration between certain business types. For instance, 'The Vault' specifically targets fintech businesses, whether they're start-ups or well established corporates looking to employ new initiatives.

But there are some important considerations to make when it comes to coworking. Finding the right space to complement your business, an appropriate environment for clients and employees as well as arranging the right insurance can be challenging.

Most package commercial insurance policies are designed for conventional risks. For example, office insurance protects self-contained offices and shop insurance typically covers individual retail shops.

Few cater for community based work spaces and many insurers have yet to catch up with the sharing economy in terms of the cover they provide. This is not necessarily due to the risk that you or your business presents to an insurer, but the hazards that could be presented by other occupants and the fast changing nature of these environments.

For instance, one of the conditions for the provision of theft cover is that there must be forcible or violent entry to or exit from a premise. If a laptop was taken from a desk in a coworking environment, whether it was a visitor to the building or someone from another business in the space, theft cover might not be valid. Similarly, if someone was to get injured as a result of a machine malfunction in a creative hub, there could be a dispute over liability, particularly if they’re an employee.

Data protection is much harder to guarantee in a coworking environment where personal possessions potentially storing data can be more vulnerable to theft as well. Data security must be a top priority for any business handling customer and employee data or other sensitive information. New regulation that came into force on 25th May 2018 means that businesses could face much higher fines for data breaches and need to ensure they are compliant with the General Data Protection Regulation. Aspects like these will need careful consideration for coworkers and will most likely be a condition of cover for cyber insurance with most insurers.

To help you decide on the covers you need, we’ve put together a list of some of the main insurances available to coworkers as well as some information on how working in a shared environment might affect each cover.

Public Liability insurance

In a coworking space, it’s everyone’s responsibility to make sure the environment is suitable for guests and visitors. Good housekeeping and regular maintenance form part of this obligation, but as careful as you may be accidents can happen when you least expect.

If a visitor to the coworking space slipped on a spilt drink and injured themselves, they could be entitled to compensation. Establishing liability in these circumstances can be challenging and in some cases the proprietor of the coworking space will have an insurance policy to protect against this. It’s still advisable to get your own public liability insurance in case an accident or injury can be directly linked to you or your business.

Employers’ Liability insurance

Whether you employ a team, an individual, or you’ve joined forces with someone as directors of a limited company; you may be legally obliged to take out employers' liability insurance. This compulsory insurance offers financial protection for your business in case a member of staff injures themselves at work.

In a coworking environment, the risks of an accident could be considered to be slightly higher, particularly if manual work is involved, so be sure to fulfil your legal obligation by including employers’ liability insurance in your business insurance policy.

Contents insurance

As we mentioned earlier, the risk of something happening to your business belongings could be higher in a coworking space. While there are certain restrictions to theft cover, there are policies out there that are designed to offer contents insurance in coworking spaces. You may find that the owner of the space offers a certain degree of cover, but if you’re leaving vital equipment in your coworking space you should try and arrange your own cover for peace of mind.

Business interruption insurance

Sharing a workspace exposes you to risks presented by others and their business activities as well as your own. While these might seem minimal, your business could suffer if something happened in your coworking space that damaged your equipment. Business interruption insurance offers cover for increased costs of working and loss of gross profit in the event you suffer damage to property that disrupts your ability to trade

Cyber insurance

We’ve touched upon the importance of data protection and the need for security in your shared working environment. While most data breaches are associated with hacking, you also have to consider the possibility that a hard drive could be taken from right under your nose. Cyber insurance can’t protect you against theft, but it can offer help to minimise the collateral damage resulting from theft of data including reputational impact and cyber business interruption.