Working from home is a great way to be flexible about your main source of income, but it does come with additional responsibilities you usually wouldn’t care about when working in an office. One of those responsibilities is insurance – every workplace has some sort of insurance policy, but when your home becomes a workplace, what changes?
Below is some helpful information about when to declare yourself as a home worker, and the different scenarios that most home insurance policies will and won’t cover.
Declaring When You Work From Home
The most important thing you need to do when you start working from home is to declare it to your insurance providers. Regardless of what business you will be running, it needs to be declared in case it alters or invalidates your current home insurance policy. You may not even need any additional coverage, especially if you will be doing simple office work like writing documents or replying to emails, but insurance providers can be very strict about liability and pay-outs if your circumstances change.
If you’ll be doing general office work, homeowners insurance providers will categorize this as clerical business use, and will most often not require you to purchase additional coverage, unless you use specialized business equipment. If you are, for example, an online seller and you keep stock in your house, your homeowners insurance policy will not look at this as your personal property. It will be considered business property and needs to be addressed separately. Depending on the value of stock, it may mean that you will need to purchase an additional policy that covers your specific circumstances.
Most home insurance policies don’t fully cover the equipment you’ll need to work from home. Of course, things like computers, printers, and other equipment that most households already have will be covered by the policy, but things can get complicated if you need to have additional business equipment in your home.
If you’re working for a company, there’s a chance that your employer will have a separate insurance policy on equipment that’s provided by them, though you may still be liable for any damage or loss depending on the exact terms of the policy. If you purchase your own business equipment (that isn’t the standard ‘home office’ equipment mentioned earlier), you will likely need to arrange for additional coverage to your existing home insurance policy.
Clients Visiting The House
If you have clients that visit your house as part of the service you offer, you will need to inform your homeowners insurance company. This is because you may require something called liability insurance, which covers things like injuries and damage to the property, and is completely different to regular home insurance. Having clients visit your home immediately makes your home and the items inside of it ‘higher risk’ that a typical homowners policy.
Most insurance companies determine the extent of your home business liability based on the amount of foot traffic generated by your services, so you’ll find yourself paying lower rates if you don’t get very many in-person client visits. As an example, individuals working as pet or child minders, music teachers, or at-home beauticians will see more foot traffic than a real estate agent working from home, and so will have to purchase a policy with higher liability coverage.
Some companies will allow you to have clients visiting your home if you already have a business owner’s policy purchased. In short, this policy combines business property insurance with business liability insurance, helping you to cover anything ranging from theft or injuries, to even fire damage. However, this does depend on the insurance provider, so make sure to research this carefully to avoid purchasing the wrong kind of policy.