You can get a quote for shop and house together on the same policies. I have seen insurers quote for a shop with flats/apartments above them so i dont see what the problem would be with this.
If there is a seperate entrance to the house and one to the shop, you could insure them as two seperate buildings. Its viable to tell insurers that you are changing the shop to a living area if thats what you are doing, if you are just saying that to get a cheaper quote and intend to keep it as a shop, if anything happened or the premises was ever surveyed by insurers you could claims repudiate or policy cancelled due to non-disclosure of a material fact so i wouldnt advise going down that route.
You basically need to decide whether you intend to keep the shop and then talk to a good broker about getting you the best price and what cover you need.