More people are working from home than ever. You may have wondered whether working from home will affect your personal insurance coverage, rates, or liability. Whether you need additional insurance coverage will likely depend on what kind of work you are doing in your home.
“Working from home” is colloquially used to describe both employees that enjoy the privilege and ability of working remotely for a third-party employer as well as those who own a home-based business. An employee of a business who is remote working will have different insurance needs and liabilities than someone running a home-based business. Workers running a home-based business are “independent contractors” or business owners rather than employees.
Remote Employees: Same Coverage, Different Workplace
Generally, for employees of a company, the personal insurance requirements don’t change very much whether they work out of a dedicated corporate office, on their back patio, in a coffee shop, or on the beach. Employees who are remote working (whether full-time or part-time, temporarily or permanently) are entitled to have their employer provide the tools and equipment to perform their job duties, which may include outfitting a home office.
The employer’s commercial property insurance typically covers business-owned equipment provided to you for work-related purposes, including laptop computers, mobile phones, tablets, and other technology. If these items are damaged, lost, or stolen, a remote-based employee would make a claim to their employer (which would make a claim to its insurer) for repair or replacement compensation.
If your remote employer requires you to meet with clients in your home, you should be aware that any injuries or other occurrences that happen on your property would not be covered by your homeowners or renters insurance policy. Instead, these claims should also be directed to your company’s commercial insurance policy.
Home Businesses Have a Range of Different Insurance Needs
Independent contractors and owners of home-based businesses will have different insurance needs than remote employees working from home. Typically, homeowners insurance coverage will not cover losses related to a home-based business; some policies explicitly prohibit running a business out of your home and may deny an otherwise covered loss. If you are running a home business or working as an independent contractor out of your home, you should discuss your insurance coverage needs with your insurance provider.
Possible additional coverage options for your home-based business include small business insurance policies, home business insurance policies, professional liability insurance policies, umbrella coverage policies, or endorsements. Your coverage needs will vary, but you should talk to your agent about:
- Whether you are an independent contractor, sole business proprietor, or a small business owner with employees;
- The types of services or products you produce or provide;
- Whether you use your home to meet with clients or provide in-person services;
- Whether you use your home to build, manufacture, or create products or merchandise;
- If you have dedicated home office, storage, or other space in your home for your business;
- If you have property or equipment that belongs to your business, like electronic equipment, machinery, vehicles, or other high-value items;
- If you use your personal motor vehicles or other insured vehicles (boats, aircraft, etc.) for business use;
- If your business involves increased risk, liability, or hazards that may impact your other property or personal insurance coverage.
You should also understand and discuss with your coverage provider the terms of any personal liability policies or professional liability insurance coverage. It may be to your advantage to bundle your homeowners insurance and general liability insurance coverages with additional coverage like a home business policy that can help protect your small business coverage needs.
Protect Yourself with the Right Policies
If you own a small business that you operate out of your home, your insurance coverage needs may change if your business grows larger and more profitable. Hiring employees, renting additional storage space, contracting with producers and distributors, and other momentous growth events can result in gaps in your coverage. Make sure you have the protection you need by consulting with a professional insurance provider. An experienced insurance professional can make sure you are getting the best value for your insurance dollar while providing quality coverage for your home and business.
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