There are signs of hope that the COVID-19 pandemic will end someday now that vaccines are being distributed. But with soft and hard lockdowns continuing across the country, you should check how working from home affects your home insurance.
While you think your insurance may cover you at home, work-related activities may not be covered if you’re an employee or entrepreneur running a business out of your residential property.
How working from home as an employee affects your home insurance
Remember when you had to commute to the office? Depending on traffic or how busy the transit system was, it was a chore. Now, the commute to the home office is just a few steps away, and according to the results of a RATESDOTCA survey, 28% of Canadians say they will continue to work from home after government restrictions are eased. If you are among them, the coverage you need depends on who provided your computer and other home office equipment.
If your employer provided you with a computer, monitor, desk, or chair, it may not need to be covered by your home insurance because it might be covered by your employer’s commercial policy.
In some cases, companies will have agreements with their workers that they won’t be held responsible for damage or losses to equipment while it’s not onsite. So, if you happen to drop your laptop on the way to the couch because you want catch-up on the news, it shouldn’t be a problem. However, you should verify this with your company just to be sure.
You should also review your home insurance policy or contact your insurer to find out if you need additional coverage. Working from home may be considered “incidental business use,” which could be excluded in a standard home insurance policy. There may also be an issue related to liability. However, there aren’t many additional liability risks if you’re working from home on your computer.
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How working from home as an entrepreneur or business owner affects your home insurance
Many entrepreneurs may have started their business at home but moved out as it grew and flourished. However, with tougher lockdown measures implemented in some parts of the country, working from home is strongly recommended by government health officials.
If this is the case, it’s very likely your existing home insurance policy won’t cover you if you need to file a claim. As a result, you should get in touch with your insurance provider to let them know that your business activities are now being performed at your home, as you may require a commercial insurance policy.
Although working on a computer in the comfort of your own home won’t likely increase liability risks, there are other considerations to take into account. There may be clients, employees, customers, suppliers, or others who have to visit your property for business reasons. Any increased foot traffic to your home can lead to an increase in the possibility that someone could be injured on your property.
You will also need to review what equipment is owned by you personally and what’s owned by the business. Although some home insurance policies will provide limited coverage for computers and furniture, you should have your business equipment covered at its replacement cost, not its depreciated value. And if you have to store physical inventory in your home, you’ll need to get additional coverage there too.
Having your business located at home means there’s always the possibility that something unexpected will happen and interrupt your business. If you’re in a condo, there may be a fire in another unit that prevents you from working. In a house, there’s the possibility an extreme weather event will force you out of your home.
In such cases, these types of business interruptions likely aren’t covered by your home insurance. You might be able to get additional coverage added to your current policy. If not, it’s best to contact a commercial or business insurance provider for the appropriate coverage.
With business insurance, you’ll have the option to protect other parts of your business. For example, liability insurance protects you against the legal costs arising from someone suing you as a result of being injured on your property.
There’s also errors and omissions insurance (also known as professional liability insurance) — which is for people who work in professional services such as lawyers, accountants, or healthcare professionals. This type of insurance covers legal costs in the event you’re sued due to negligence that causes financial losses or bodily injury.
How working from home affects auto insurance
In 2020, many insurers gave discounts to clients who were no longer commuting and working from home. If you returned to work last year but have been told to resume teleworking again, you may be able to have your car insurance premium reduced.
If you’ve lost your job and begun delivering food or carrying passengers to make ends meet, your current auto policy may not cover you. If your work situation has changed, in any way, contact your insurance company or broker to find out if you need to get additional coverage.