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Is working from home covered by home insurance?

According to the Bureau of Labor Statistics, nearly 1 in 4 Americans employed in 2021 currently work from home. If you are part of one of the many remote workers in the U.S., you may have wondered how or if your new work status affects your home owner’s insurance. 

There are many benefits to working from home such as work-life balance, no commute, and a more flexible schedule. And because of the pandemic, companies have seen a notable increase in productivity in employees who work remotely (equating to about 1.4 more days of work per month on average), giving them an incentive to transition their workforces to more permanent remote positions.  But whether your work from home situation is temporary or permanent, do you know how you and your work property would be covered in the event of the unexpected? Depending on your employment situation, the answer to this question will differ. 

It’s important to understand your insurance risks to avoid leaving you vulnerable in the event disaster strikes. Now is a great time to take a look at your current insurance plans and evaluate whether you have adequate coverage as a work-from-home employee. 

Full-time Remote Employee

If you are a full-time remote employee, typically, your employer’s business insurance policy will have remote worker liability insurance and coverage for any company equipment approved for at-home use. Your home owner’s insurance does generally cover you when you work from home, but with exceptions that depend on the specific situation.

Homeowners insurance does have limited coverage for liability when you are working from home. So in the event a client visits your home and is injured, your home insurance policy will likely not cover their injury or medical expenses. But the good news is, your employer’s liability insurance may cover accidents depending on the nature of the injury and the type of coverage they offer. Oftentimes, your employer’s insurance will expect you to provide a safe environment for visitors, so if the accident is due to your negligence (such as slippery floors), you may not be protected. 

In the event of a home fire or theft, your approved home-use equipment, such as a laptop, will likely be covered and replaced by your employer. Every insurance policy is a little different, so the best thing to do is ask your employer what is covered and what is extended to you as an employee by their business insurance so that you are adequately protected. In most cases, you and your work equipment are usually protected by either your home insurance policy or your employer policy when you work remotely. 

Business Owner

Much like the remote employee working for a company, home owner’s insurance is limited in what it will cover a business owner working from home. And in some cases, operating a business out of your home can even violate the terms of your homeowner’s insurance policy. But the size and scope of your business are important in determining your needs as well. If you’re a freelancer with very little physical inventory and minimal equipment, you may not need extensive coverage. 

Home owner’s insurance and business insurance are two different things and if you own your own business with equipment and/or inventory, you may want to consider purchasing business insurance to ensure everything is protected and that you are safe if the unexpected occurs. Because business equipment can be significantly more costly than a typical home’s furnishings, the cost to replace them may be higher than your homeowner’s insurance will cover. Business insurance will provide coverage for your business property on and off premises and for liability of injury in the event someone is injured when on your property for business. Business insurance will also typically offer interruption insurance to cover lost revenue when a loss forces you to temporarily reduce operations – something we know about all too well during this pandemic. 

Please contact our office and our team can help you determine if and which kind of business insurance is right for your small business. We will work with you to find the best solution that makes the most sense given your individual circumstances.  

Insurance Perks for Remote Workers

An added perk that is often overlooked as a work-from-home employee benefit is car insurance. Consider reviewing your current car insurance policy as you may be able to drop certain coverages or you may be eligible for low mileage discounts now that you are driving less. 

We understand that it might feel overwhelming trying to understand what coverage makes the most sense for your unique situation – that’s why our expert team is here to help. We will work with you to get you the absolute best rate possible and only the coverage you need. Whether you’re a remote employee or a remote working business owner, give our office a call today and let us help answer any and all of your insurance questions. 

Don't lose coverage. Let Classic Insurance help today!

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