For many people, working from home is the ideal job. You don’t have to commute to the office every day. You don’t have to get dressed and ready to impress colleagues. You can even skip the boring chat with the water cooler.
Instead, just get up, go to your home office, and get your work done. You might even be more productive at home.
When you have finally reached the home work of your dreams, or are forced to work from home for some other reason, there is one aspect that few people consider before starting work at home. That’s insurance.
Depending on your situation, you may need to update your insurance products to ensure that you are still fully covered.
Disclaimer: Every insurance policy is different
Before I get too far into the weeds, it is imperative to read your individual homeowner or tenant insurance policies.
Each insurance company has its own policies, which can vary from state to state. To make things even more complicated, you may have added a driver or additional coverage to your insurance policy, or you may be able to add them to cover specific situations.
Essentially, this means that your neighbors’ insurance will be slightly different from yours. While they all cover the same general things, each may have different exceptions or policy restrictions for specific times.
I learned this firsthand after a category five hurricane hit my old hometown. What was covered for one friend was excluded for another.
Ultimately, your insurance policy determines which claims are paid, what is and what is not. This is the ultimate source to refer to, with your insurance agent second.
If you find you need more coverage, go for it Policy genius Here you can compare several offers from different companies in one place.
How homeowner insurance works
Homeowners Insurance has a list of specific coverages with different amounts for each type of cover. Common main coverage groups are as follows:
- Reporting A. – Insures your apartment or structure of your house.
- Cover B. – Insures other structures on the property, such as sheds or fences.
- Cover C. – Insures personal property such as furniture, clothing, pots and pans, etc.
- Cover D. – Insured against the loss of use of your house, e.g. B. when you can’t use it after a tornado tears off the roof.
- Cover E. – Insured against personal liability, e.g. For example, if someone slips and falls into your house and then sues you.
- Cover F. – Insurance against medical payments to third parties for injured persons on your property.
Working from home can most often affect your Coverage C, Coverage E, and Coverage F policies.
How working from home affects your policy depends on your specific circumstances. In some cases, you may not need to adjust your homeowner or tenant insurance at all. In other cases, you may need to take out additional insurance.
Do you work as an employee for a company?
Thanks to coronavirus restrictions, it has become common to work from home as an employee of a company. If you’re actually a W-2 employee getting a paycheck, your homeowner insurance is probably fine.
However, you should check with your employer to see if the equipment in your home is covered by the insurance policy.
In general, the company’s insurance will cover their property wherever it is. Your best bet, however, is to double-check. You don’t want to bear the cost of owning the company if your house burns down.
Have you set up a home office with expensive items?
There may be instances when you need to increase your homeowner’s insurance coverage. Let’s say you’ve never had a home office and decided to add new furniture to a room.
You paid for this furniture yourself and you own it. If this furniture add-on puts all of your personal belongings above your C Coverage Limits, you will need to increase your C Insurance Limits to make sure they are covered.
My C Coverage Limit on my policy is 50% of my Residential Limit or A Coverage Limit. I almost don’t have enough personal belongings to reach this amount. So adding new furniture for a home office wouldn’t push me over my limits.
Read your guidelines to see where your limits are. Make sure you are among them when you acquire new personal property for your home office.
Are you a contractor or business owner?
If you’re not a W-2 employee, things are a lot more complicated. Specifically, 1099 contractors who are independent contractors for a business and business owners who work from home may need to take additional steps.
In these cases, you will likely need to get your own business insurance to properly cover your liability. As a 1099 contractor or business owner, your company likely owns all of the equipment and supplies to run your business.
Even if the company you signed up with gave you a scholarship to buy technology like a laptop, you likely don’t own that laptop. They do. If the laptop gets damaged in your home, it is your responsibility.
Certain 1099 contractors or business owners may face even greater risk. Many companies require customers to visit a place of business. For example, a home photography company may invite customers to their home studio to take photos. In this case, they may also need public liability insurance.
If your friend fell down the stairs when he went downstairs to watch the big game, homeowner insurance would likely cover the cost. It doesn’t work the same way in a business accident.
Let’s say the photographer’s client falls down the stairs at the photographer’s house while walking to the home portrait studio in the basement. Your personal homeowners insurance would likely not cover this accident as it was business related.
If the photographer does not have adequate business insurance to cover the costs, they may have to pay the costs out of pocket.
You may need special business insurance
Because of these additional risks, business owners and 1099 contractors who work from home may need additional insurance over and above homeowners insurance.
A business owner should always take into account Professional Liability Insurance. A proper policy can cover you up to certain limits for liabilities that arise from doing business. Make sure the policy covers your particular circumstances before buying it.
Next, Failure and omission insurance is another form of coverage many business owners and 1099 contractors should consider. If a mistake you made costs a customer money, they may be able to ask you for compensation. Proper failure and omission insurance can have you covered, provided it is written for your job and your situation.
Other types of insurance that you may want to consider include Commercial property liability to cover your company’s affairs and Labor compensation insurance to insure your employees if they are injured at work.
You may be able to add drivers to your personal homeowner insurance to cover limited home business without purchasing a new type of insurance policy. Check with your insurance agent to see if this coverage would insure your business against the risks of working at home.
Get new insurance quotes and potentially save with Policygenius
If you’ve determined that you may or may not need more insurance, this is a good place to check Policy genius to see if you can save on your insurance costs. Policy genius This option allows you to complete a single application for one type of insurance and then receive offers from multiple insurers.
The Policygenius process gives you two advantages. First, you save time by avoiding the hassle of filling out a different application for each insurer you want a quote from. Second, you can save money by showing some price quotes side by side. This way, you can choose the cheapest insurance policy that suits your needs.
Check your current insurance policies to make sure you have adequate coverage, whether you are currently working from home or have been working for years. If you are not adequately covered, call your insurance company and increase your limits if necessary.
You may want to get new quotes to see if you can save on your insurance costs while you think about it.
Business owners and 1099 contractors may need to get more insurance to cover their office equipment and liabilities. While insurance can be problematic to deal with, if you ever need to make a claim, you’ll be glad you did.