With the pandemic, many have been forced to work from home to minimize exposure and slow down the spread of the virus. Home offices have now become work headquarters and laptops or desktops, printers, webcams, keyboards, headsets, iPads and tablets are now important tools to use when you show up for work every day – even if the work is at the kitchen table. in slippers and PJs.
With the sudden transition to home-based work, probably not much time, if any, has led to the following thoughts:
- I wonder if I am covered by my homeowners' policy for my business work if I work from home?
- Does my homeowner policy cover office equipment?
- Am I still covered by my employer's liability and commercial property insurance if I work from home?
- What steps should be taken to ensure coverage at home?
If you have homeowners insurance, the first step in answering coverage questions is to read the policy to determine what is and is not covered. As with most topics in insurance, coverage response depends on the language of insurance. Potentially worrying for people working from home is that homeowners' policies usually have exclusions of liability for bodily injuries and property damage resulting from business-related activities. Thus, in general, an ordinary homeowner is not designed to cover home-based businesses or a situation where you work from home.
The standard household ownership policy is designed to protect personal property while it is being used for personal use. Any loss of personal items for personal use is covered by a homeowner's insurance for compensation cost minus deductible amount. But as soon as personal property is used for business purposes and destroyed, there are limits in that situation to how much a homeowner will pay to replace the property. A standard homeowner policy typically has a limit of $ 2,500.00 for "business personal property" that is damaged or lost in the "residential premises." 1
Coverage for business equipment used at home may also depend on "how" or "who" bought the computer, printer or desktop. If an employer bought the computer, printer, desk or other business equipment for use by an employee at home and for example this equipment is destroyed by fire, it can be covered by the employer's insurance as if it were covered if it was destroyed in the office. Again, however, it depends on the language of the employer's commercial insurance or business insurance.
Coverage for personal liability when an employee works from home usually has limited coverage. For example, if clients now come to an employee's home for business purposes, a homeowner policy will probably not cover a client or guest who slips and falls down the stairs – an accidental injury – or covers medical from there. The homeowner will pay for the damage and these costs. An employer's insurance policy in that situation will probably not be covered either, although some business policies cover the liability of remote employees, but with that coverage also comes the requirement that the remote employee is responsible for maintaining a safe working environment, which means that if the damage was caused by the homeowner's failure. to maintain a safe working environment, there would of course be no coverage. International Risk Management Institute puts it this way:
Important: If you do not update your homeowners insurance to reflect the fact that you are using your home for business purposes, your insurance company may deny a business-related claim that is not explicitly covered by your existing policy. . In many cases, courts will exclude business exemptions from your insurance, and you can leave to pay for damages and debts out of pocket. 2
So, after reading your homeowners policy and realizing more coverage for business related requirements is required, how can coverage be added to a homeowners policy? One way is to go online to the Insurance Services Offices (ISO) website. This is an organization that develops standard insurance forms and has created endorsements that can be added to the existing homeowners policy to cover commercial properties and liability when you work from home either part-time or full-time. 3 Look at these forms and familiarize yourself with them to determine if any of them relate to your situation and contact your insurance company or agent to choose a proper approval. There are several types to choose from.
A recommendation entitled "Business Pursuits Endorsement" provides liability protection for occupations classified as office, instructional or sales work. This option does not provide coverage for sole proprietorships or a business partnership. Another option is a "Home Insurance Insurance" which provides coverage for corporate real estate, corporate income, personal liability, medical payments and additional cost coverage for home-based businesses classified as office, service, sales, or craft. With this approval, companies must also meet eligibility criteria such as maximum annual revenue level and a ceiling on the number of employees. These latter terms may differ very much from different insurance companies, however this statement and those there are popular endorsements for coverage for working from home.
A third option is a certificate entitled "Home-Based Business Endorsement" ] from the American Association of Insurance Services ("AAIS") which is an ISO organization that develops standard policy forms. This option includes three additional business classifications for coverage: retail, food and bed and breakfast establishments. 4 Adding a recommendation to a homeowners policy costs extra in premiums but it is not an outrageous increase and is generally less than $ 100 with some as little as $ 25.00. 5
Finally, if none of the three types of home business approvals are applicable, it is possible to obtain a business owner policy ("BOP"). Typically, this type of policy is for small home businesses and provides commercial real estate and equipment and general liability protection. 6 These coverages tend to be on a much wider scale than one of the above three types of domestic companies.
To summarize, if you are a full-time employee who now works from home, you may be covered by your employer's commercial business policy, but you will still need to verify from HR which extensions are extended to remote employees. If the protection under your employer's policy is limited, it may be time to read your policy or talk to your agent to learn what is and is not covered by your homeowner's policy. If there is limited coverage for business purposes, it may be time to consider getting one of the four types of recommendations to add to your homeowner or buy a brand new BOP. One of these options can provide the missing coverage you need.
1 See Insurance Information Institute, Insuring Your Home-Based Business https: // www. iii.org/article/insuring-your-home-based-bus..19659025] 2 See International Risk Management Institute, Home Business Insurance (Part I) https: // www.irmi.com/articles/expert-commentary/insuring-the-home-based-business-part-1/olson06.aspx.
3 See International Risk Management Institute, Insuring the Home Based Company (Part 3) https://www.irmi.com/articles/expert-commentary/insuring-the- home-based-business-% 28part-3% 29.  4 Id.
5 Do you need to update your home insurance if you work from home? https://www.thebalance.com/does- home-insurance-cover-work from home- 5092895