I have a client who has been running a standard home-based consulting business for some time. It’s been very successful. They want to take on a partner or contract someone to work with them and maybe even get a part-time admin asst. They want to keep it in their home rather than pay rent because that would cost too much.
I asked a lot of questions so I could research the situation and what their insurance broker told them. Part of research is always here 
They have room for it and it won’t really impact their current lifestyle. Their downstairs is finished, so that’s where their TV is and evening leisure time is spent already (or outside in the summer). Their dining room table exists, but right now, it’s just got “stuff piled all over it all the time”. They never eat there. If they do eat upstairs, it’s at a table in the kitchen. They work during the day, spouse works out of the house, so living room use is “We have coffee and chill there a bit” before they start the day on weekends or transitioning to evenings. Sometimes, they sit in there and read.
They would get rid of the bed and turn their spare bedroom into the partner/contractor’s office. They have a large L-shaped living/dining room and would turn the dining portion into a workspace for the admin (desk/laptop/printer). Table would either be the desk or get out of the way of it. Clients could sit in the living room like a lobby if they have to wait for appointments that go long; so occasionally. It already serves this purpose and isn’t included in their office space calculation.
All-in-all, they would use about 25% of their home if they get an admin and partner/contractor and about 20% if they just get the partner/contractor. They would continue to leave the living room out of the calculation for space. It’s still mixed use and would rarely be used for people to sit and wait. They schedule people to keep that from happening.
Their insurance broker has told them they can’t do this on their residential insurance policy with a separate commercial policy for the business anymore if they have anyone other than themselves working in the house.
They have to get commercial insurance on their home, and then basically, a tenant policy on their possessions like renters would.
My question is would this impact their principal residence claim? It is their principal residence, but now it would be insured like a commercial property.
Anything else I haven’t covered?
They are looking into whether this insurance change would impact their mortgage in any way.