Don’t Assume Your Home Insurance Covers Working from Home
Whether you’re working from home or self-isolating during the COVID-19 lockdown, you might want to check how it affects your home insurance policy.
Insurance companies are offering support to their customers in different ways during the coronavirus crisis. Whether you’re an employee, business owner, or entrepreneur, you’re now running a business out of a residential property, and your existing home insurance may not cover every contingency.
How Does Working from Home as an Employee Affect Home Insurance?
Many people who are used to going into an office every day suddenly have a shorter commute to their desk. Whoever provided that desk and the equipment on it may dictate what insurance is needed.
If your employer sent you home with company-owned equipment such as a computer or furniture, you don’t have to worry about whether your home insurance covers it — your employer’s commercial policy has it covered. Occasionally, however, some companies establish agreements with their workers that they be held harmless for any loss or damage to company-issued property while it is offsite. If you spill coffee on your office laptop, for instance, you’re off the hook.
Since the transition to working from home likely happened rather quickly without any formal paperwork to govern office-issued equipment, you should verify the expectation of your employer.
In some cases, your home insurance policy may already be enough, but contact your insurance provider to be sure and add any coverage that may be necessary. It’s important to know what your home insurance policy coverage provides during the COVID-19 crisis.
Some insurance providers may already account for what is called “incidental business use” in your home insurance policy. They assume a lot of professionals occasionally use their personal computer to keep on top of work outside of the office, but there are limitations.
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How Does Working from Home as a Business Owner or Entrepreneur Affect Home Insurance?
If you are a small business owner or entrepreneur who has moved operations to your home, or the current lockdown situation has you starting a new venture, there are other insurance considerations. In this scenario, your personal home insurance policy may not cover you in the event you need to file a claim. Therefore, be sure to contact your provider and make them aware of the new activities taking place at your residence.
While you might think working from home on a computer doesn’t add that many liability risks, your business may require customers, couriers, and suppliers to visit — at a safe distance, of course.
Perhaps a customer pops by to pick up some paperwork or goods you're selling. What if they're injured while on your property and decide to sue? Similarly, your small business may have employees coming to and from your home to move inventory or equipment. If that employee uses their personal vehicle to pick up supplies and ends up in an accident that injures a third party, as their employer you may be liable if your employee gets sued.
If you do have physical inventory at your home-based business, you’ll need to add the appropriate coverage. And while home policies will provide some limited coverage for business equipment such as computers and office furniture, ideally you want any business equipment covered at replacement cost.
Moving your business also raises the possibility that your new place of work could be damaged due to unforeseen circumstances such as fire or natural disaster, thereby putting your business operations on hold. Your home insurance won’t cover this interruption. You may be able to add this coverage to your existing policy; otherwise, you should speak to a commercial insurance provider.
Other interruptions to your business may affect your ability to follow up on accounts receivable, as will theft of valuable documents such as contracts and other intellectual property. Business interruption insurance can mitigate those loses as well as cover the cost of an accountant or other professionals you must engage as a result.
How Does Working from Home Affect Auto Insurance?
Most insurance considerations, while working from home or running a home-based business, are property or equipment related, but your car insurance may be affected due to the transition too.
If you’re an employee who used to drive to get to and from work as well as attend business meetings, you may be eligible for a cut to your auto insurance premiums now that your car is sitting idle because of the COVID-19 crisis. But if the lockdown has left you unemployed, temporary or otherwise, and you decided to start up a delivery service, you’ll need to update your auto insurance policy to reflect your new endeavour.
The bottom line is the auto and home insurance you already have doesn’t automatically cover the new scenarios that come with working from home. Be sure to get in touch with your insurance provider or broker and find out what your options are.