Your homeowners insurance isn’t quite enough…
- Homeowners policies aren’t designed to cover home-based businesses or working from home.
- Failing to let your insurer know you are working or running a business from home may be violating your coverage terms.
- If you are a full-time employee working from home and using your employer’s equipment, their insurance should have you covered, but be sure to check in with both your company’s HR department and your insurance agent.
- Full-time employees working remotely using their own equipment should review their homeowner policy and add endorsements as necessary for full protection.
- If you are an independent contractor working remotely, it’s important to contact your agent and discuss business policy options that will protect you.
Working from home can be great with its lack of commute, business on the top/pajamas on the bottom dress code, and greater flexibility. And, while it’s not new, it’s part of the new work paradigm during and post-Covid.
Whether you work at your kitchen table or have a nicely outfitted home office, you might be using your personal computer, printer, webcam, monitor, or other equipment to get the job done.
Have you thought about what might happen if these expensive items are stolen, damaged, or destroyed? You might expect that your homeowners policy will cover everything and get you back up and running. Unfortunately, that’s not the case.
A homeowners insurance policy is not designed to cover a home-based business, work done under part-time or full-time employment, or any business conducted as an independent contractor or consultant. Let’s look at what coverage you need in these situations to make sure you’re protected.
What homeowners insurance covers when you’re working from home
Your homeowners insurance policy isn’t designed to cover a home-based business, and most policies provide only up to $2,500 in coverage for equipment on your premises that is used for business purposes. However, you may be able to double or triple that limit by adding a modestly-priced endorsement.
You’ll also need coverage in case a client or delivery person is injured on your property, but this policy is generally only available for businesses that have very few visitors, such as writers and other professions that require mental rather than manual skills.
Note that if you don’t update your homeowners insurance policy to include the fact that you’re using your home for business purposes, your insurer could, and probably will, deny a business-related claim on a policy that doesn’t explicitly include endorsements for business activity.
The coverage you need depends on your employment status, so read on to be sure you’re protected in your situation.
Working from home as a full-time employee
If you’re a full-time employee working from home, it’s likely that your employer’s business liability policy will cover any accidents or incidents that happen on your property. You’re also still covered by workers’ compensation insurance if you’re injured while working, and it would be the company rather than you who would be held liable if someone is hurt while visiting your home for business or if their property is damaged.
As for equipment such as a company laptop, your employer is usually responsible for covering any losses due to damage or theft. However, it’s important that you check in with HR and find out what protections are extended to you while working from home.
Contact your insurance agent to find out if you need additional coverage that is not provided by your employer. Check that you’re not violating any part of your current policy agreement. Make sure you’re covered if your company has a “bring your own device” policy.
Working from home as an independent contractor
If you’re an independent contractor, you are considered self-employed, and while your client’s business insurance policies covered you while you were working on their premises, once you begin working from home, that coverage will cease and it’s time to get coverage of your own.
Ask your agent about an in-home business policy. These generally provide more comprehensive coverage for your business equipment, as well as liability, than an endorsement you can add to your homeowners policy. Make this an in-depth discussion because policies can vary greatly from insurer to insurer.
This type of policy will also reimburse you for losses like important papers, records, accounts receivable, and off-premises business property. Some will even pay for lost income if your home is unusable after a fire or other disaster, as well as for the extra expense incurred to operate from a temporary location.
An in-home business policy generally includes broader liability insurance with higher amounts of coverage and may offer protection against lawsuits for injuries caused by your product or service offerings.
Make no assumptions – check your coverage today
Many home-based business owners and remote workers are under the false assumption that their homeowners insurance policy will cover them if they suffer a loss. The fact is that homeowners insurance policies have limits on the types of losses that could affect you, some types of business-related claims may not be covered, and your homeowners policy could even say your home business is violating coverage terms.
Contact your insurer so you understand exactly what your existing homeowners policy covers, and then discuss what additional coverage you may need to protect yourself and your livelihood.
Get the home workers insurance you need from Avante
The world of work has changed and so have your insurance needs. At Avante, we’ll work with you to build the complete coverage you need with a deductible that works for you. Reach out today, because you never know what tomorrow will bring. At Avante, we’re always standing by.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.