If you’re like most of us, you’ve been working from home since the pandemic began. If you’re an employee just plugging away on your laptop, working from home shouldn’t affect your home insurance. But if you run your own business, or if your job requires interacting with clients, making or receiving deliveries, or having expensive business equipment at home, you should check with your insurance broker to make sure you have the coverage you need.
Even before the COVID-19 pandemic washed over the country and seemed to change the working environment forever, the trend was already moving towards more “home office” days, meaning more and more people were already starting to work from home on an increasingly regular basis. COVID-19 only sped up this process. Add to that the other trend of people starting up small businesses from their home in order to pocket a little extra money, and the question of how this all affects your home insurance policy has become a source of much worry and confusion. So how does working from home affect your home insurance?
If I am temporarily working from home, am I covered?
Most home insurance policies have exclusions stating that no business is being run from your home, and that can include work you do for your employer. Still, it is important to know that working out of your home due to the pandemic or other such temporary reasons will not necessarily affect you. Most employers today will have some coverage for business equipment that staff use from home, but that’s usually limited to the equivalent of a laptop and maybe a smartphone.
Will my employer’s insurance cover me?
It is likely that you are covered under your employer’s insurance policy for any business equipment you use at home, though that coverage may be limited. It is important to ask your employer what exactly the company’s policy covers you for. The two important questions to ask your boss:
- Ask your boss if you are covered for liability, especially if you are getting work related deliveries brought to your front door, or entertaining clients at your home for meetings and interviews and such. Your home insurance won’t cover you for work related guests and deliveries.
- Also ask if you are covered for any equipment that has been moved from the office to your home, as well as any equipment you have been forced to buy in order to do your work effectively. If that equipment is expensive, its value may exceed the limit on business property in your home insurance policy, which is usually somewhere under $5,000.
Should I get commercial liability insurance while working from home?
Employees temporarily working from home do not need commercial liability insurance. But if you have decided to earn a little extra money by starting up a side gig, there are some things you should know. Even if the COVID-19 restrictions are relaxed enough to allow it to happen, meeting clients in your home could be more of an issue than you might think. It may feel like there is not much difference in welcoming a client in to sign a contract or simply having friends over to watch a football game, but there is when it comes to insurance. If that client ends up tripping over an extension cord, or even if a delivery worker slips on your front stoop while bringing you important work documents, you could face legal action, and you probably aren’t covered under a typical home insurance policy. You may want to look into commercial liability insurance if:
- You need to store inventory in your home or garage
- You use any kind of manufacturing equipment at home
- You are receiving work related deliveries to your front door
- You are entertaining clients, however unlikely this would be during a lockdown!
- Your side business involves pottery or baking that requires you to use appliances like an oven more than usual
What is an individual office use endorsement?
If you are not letting clients into your home and are merely looking to extend the coverage of a range of equipment and electronic devices not covered by a company policy, a home insurance policy add-on called the Individual Office Use endorsement is most likely enough for you. Such an endorsement typically costs between $20 and $30 more a year and will extend the coverage to items not covered by your home insurance, or by your employer’s policy.
Do I need to notify my insurer about working from home?
While it is always a good idea to talk to your insurance provider about changes to your home office arrangements to be certain you continue to enjoy full coverage, merely working from home on a company laptop for a temporary amount of time, such as during a lockdown, will most likely not affect your ability to receive compensation should office items get stolen or damaged in your home. But…
- if you are required to use unusually expensive equipment;
- if you must travel from place to place with that equipment in your car;
- if you must entertain clients in your home; or
- if you are operating a side business privately for some extra cash,
…then you really should contact your insurer and inform them of any changes that have happened since the policy came into effect.
Will working from home increase my home insurance premiums?
Home insurance doesn’t work the same way as auto insurance, where an increase in use leads to an increase in premiums. Just being at home more does not mean you will have to pay more for insurance. In fact, certain risks go down the more you are at home, such as break-ins and damage from burst pipes. These kinds of factors balance out the risks that get higher, such as fire and injuries to guests. So insurers don’t calculate home insurance by the amount of time spent in that home. But hey, if you’re worried, especially if you’re running a little home business on the side, don’t hesitate to ask your insurance provider to be sure. Make sure you are fully covered! Or call Mitch today to find a home insurance policy that meets the needs of your current working reality. We’ll find you the best possible coverage at the best possible price.