Everything you need to know about insurance and working from home
Fact-checked with HomeInsurance.com
The COVID-19 pandemic has led to unprecedented changes in our daily lives from how we interact with others to where we work. If you’re working from home for the first time, now is a good time to take a look at your insurance coverage to make sure you’re fully protected.
Your homeowners or renters insurance covers the typical risks you’ll encounter in your personal life, like damage to your personal property or lawsuits against you. But when you introduce elements of your work life, you are exposed to unique risks that may not be covered by your personal policy.
We asked insurance expert Virginia Hamill what insurance coverages people working from home should consider, and the answer primarily depends on whether you are telecommuting or self-employed.
Work-from-home coverages when you’re telecommuting
Just as you’re protected by your employer for work-related injuries and liability when you’re acting within the scope of your job at the office, you will likely be covered for all of these things when working at home.
But, as is typical when it comes to insurance, it doesn’t hurt to double-check. Ask your boss whether you will be held responsible for any damages to employer-owned equipment when working from home.
“Some employers may hold you responsible for the damage and require you to pay for repairs or a replacement,” says Virginia Hamill, the Senior Insurance Analyst with FitSmallBusiness.com. “In that case, you want enough liability coverage in personal insurance to cover that cost.”
Personal liability coverage is available through both homeowners and renters insurance.
If you have a mortgage on your home, your lender will most likely require that you have homeowners insurance, but this is a powerful protection that we highly recommend you hold regardless of whether it is a requirement.
While your employer typically holds the risk of the damages and liability you face within the scope of your job, protecting your home and its contents, as well your personal liability are all important functions of your homeowners insurance policy.
Unlike homeowners insurance, renters insurance won’t cover the building you live in, but that’s because it doesn’t need to. Your landlord has a separate insurance policy to protect their property (the building, appliances, etc) while your renters policy will protect your belongings (your furniture, electronics) and your personal liability.
Work from home coverages when you’re self-employed
“As business owners, self-employed workers need to make sure they have sufficient coverage,” Hamill recommends. “That might mean getting a business owner’s policy or business endorsement for their home insurance because most insurers exclude business activities.”
A general liability policy, or business insurance policy, provides a broad range of protections for including bodily injury, product, and advertising liability coverage. This is a good option for small business owners looking to and it can also be bundled with other coverages to customize based on your needs.
A professional liability policy covers lawsuits brought against you by clients that believe your mistake caused them to lose money.
This type of protection is valuable for professions like accounting or consulting where your actions can have a large impact on a client’s business and will apply whether the accusation is true or not.
“Self-employed renters whose businesses are their primary source of income should look into a business endorsement on their personal insurance,” Hamill says.
Freelance writers and other business owners who have limited foot traffic into their home may be a good fit for this simplified coverage option, but avoid trading simplicity for insufficient coverage.
Talk with an insurance agent about your unique needs
“A failure to disclose to your insurance company that you are running a substantial business out of your home may result in being denied a business-related claim or a failure to renew your policy,” NAIC website.
This means that even if you have a lucrative side gig, you may want to check in with your insurer for additional coverage. When the lines between home and work blur, it’s a good idea to reach out to your insurance agent to discuss what that means for your coverage.