According to a recent Gallup poll, some seven out of every 10 white-collar workers are still working remotely. This trend of course began when the COVID-19 pandemic was raging across the nation. Today, even though there is a vaccine, many employers and workers are keeping the same arrangement, some have even shifted to permanent remote roles. If you can relate, and you are working out of your home, now— with the craziness of 2020 finally fading— might be an excellent time to slow down and review your current homeowners’ insurance policy to see if your current home office setup is adequately protected.
1. Does Working From Home Affect Homeowners’ Insurance Policies?
Our short answer: yes. Working from home can affect your homeowners’ insurance policy as this is not the same as a business insurance policy. Home insurance protects your personal property while using it for personal use, not the same with business usage.
2. Does My Homeowners’ Insurance Policy Protect My Home Office Equipment?
Maybe. We know, ambiguous, but it does depend. Therefore, in some cases, there are situations where your business workspace set up within your home would not be considered protected under your standard homeowners’ policy.
Consequently, you should think long and hard about how much it would cost to replace all your current office equipment. Consider the following list of some of the most common equipment that is part of almost everyone’s home office setup. Consider that you might have to foot the bill if this stuff is damaged in some cases:
- Laptop
- Cell phone
- Printer
- Extra monitors
- Desk and/or chair
- Webcam
- Keyboard
3. What is Normally Covered?
Most homeowners’ insurance policies do cover your personal property. However, when you use it for business purposes, there is a limit for replacement cost reimbursement. For example, in some cases, when you use an item for business purposes, and you work from home, then your homeowners’ insurance will only cover up to $2,500 for personal property you use for business if it's lost or damaged while in your residence. Of course, this is subject to your deductible. Consider the items listed above. Could you replace every single piece of equipment for $2,500? In most cases, the answer is no as computers alone are often more expensive than that. This is when it’s a good idea to add the office occupancy endorsement, which is outlined below.
4. Can You Increase Your Homeowners’ Insurance Coverage Now That You are Working From Home?
Yes. When you add an office occupancy endorsement to your policy, it can provide the coverage you need for your personal computer or other items of value that you use to do your work from home. It might not protect items that your company lends you that you do not own. This might be covered by the company’s own insurance but in some cases, a loss of borrowed equipment might not be covered by any policy.
Check About Liability
You also need to check with your insurer about liability limits and how they relate to clients being on your property (if this is applicable to your at-home working environment). If you have people at your residence, for work-related situations, and they become injured on your property, they can sue you for liability for their injury. You need to determine if your current coverage is adequate for this as working from home and seeing clients in person on your premise could increase your risk of being sued. Therefore, it’s worth checking on your current liability limits while you are asking about business office coverage.
Bottom Line: You Need to Consider Upping Your Coverage
If you are or have recently made the switch to remote working, our team at Arnold Insurance can review your current home insurance policy and the limits of your current coverage.