Recent events have caused multiple professionals to move their work from the office into the home. At the cusp of quarantine, over 60% of employed Americans worked from home during the crisis. This sudden shift made it impossible for workers to consider insurance implications and whether or not homeowners insurance even covers the day-to-day wear and tear of working from home.
What Is Homeowners Insurance?
Homeowners insurance covers all or some of the potential events that could occur to you, your home, and the home’s property. To get homeowners insurance, you usually have to obtain a homeowner’s insurance inspection, although that sometimes isn’t the case. If your home is new and wasn’t rebuilt after a fire, you can get homeowners’ insurance in most cases without an inspection.
Will Working From Home Affect My Homeowner’s Insurance?
It can, because the nature of homeowners insurance is to only protect your personal property for your personal use. Your insurance would cover any loss of these items for replacement cost without a limit based on your deductible. When you use the personal property for business use, there’s a limit to how much the insurance will pay to replace it.
Even though that’s the case, it doesn’t mean you have to buy business insurance as long as your property is under a specific amount. For example, if you’re working from home with a laptop, stationary, and a printer, you can likely get away with just homeowner’s insurance as most insurances will cover up to $1500 – $2500 of business personal property if lost or damaged.
What About Traveling Equipment?
Sometimes it’s necessary to take your home office equipment back to the office, a coffee shop, or in the car or bus between trips. If your equipment is stolen or damage away from home, you won’t be covered for as much money as you usually would if it was stolen or damaged at your house.
In fact, the amount you’ll receive is slashed significantly. On average, you’ll receive a few hundred dollars ($100 – $300) for standard homeowners’ insurance. You will either need to buy business insurance, avoid leaving home with expensive equipment, or upgrade homeowners’ insurance so it will cover $500 – $1000 of lost out-of-house office supplies.
What Extra Insurance Will I Need to Cover Work From Home?
It depends on your job’s nature, but you will want to be fully covered for accidents that happen while working from home. You may be interested in three additional insurance packages, which include public and employer liability and professional indemnity.
Most standard home insurance policies will contain public liability, which covers your business if you have an injured visitor that makes a claim. Public liability also covers accidents that could occur. Even if you think your line of work isn’t treacherous, it’s still possible for visitors to injure themselves by falling down the stairs or tripping on objects.
If you’re a counseling service, an accountant, or a personal trainer, you’ll advise your clients daily. Professional indemnity allows you to provide advice without getting sued if the advice is either incorrect or ill-advised. Financial advisors should absolutely consider this type of insurance as the economy and stocks are out of professional control.
If you employ anyone, even volunteers, you need to cover yourself if they injure themselves or an accident occurs within the home while on the clock. Standard home insurance covers domestic employees like maids or gardeners, but may not protect your own workers. If it doesn’t, the employer’s liability will fill in those gaps.
Damage to Business Property Coverage
Similar to how home insurance policies cover damages incurred to your home and possessions, this extra business coverage will safeguard damages to business property. In the event your equipment is stolen or damaged due to theft, fire, or flooding, business property coverage will reimburse you for your items and running costs.
Business Interruption Coverage
Entrepreneurs often get this coverage while purchasing business property coverage because it protects you and your business income if your company is interrupted due to damages incurred from loss of inventory. Although the insurer won’t pay all costs, they will reimburse you close to the loss of business that resulted from damages.
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