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How does working from home affect my homeowners insurance?

Posted by Alexa Steffes | Jul 24, 2019 3:18:01 PM

Telecommuting (working from home) is growing in popularity. According to Global Work Play Analytics, the number of U.S. workers who do at least 50% of their work at home or some location other than a central office grew by 115% between 2005 and 2015. As of 2015, there were approximately 4 million telecommuting professionals. Though not everyone can work from home, 56% of U.S. employees have jobs that are telecommuting compatible, meaning there is room for growth.

While there are many benefits to working from home (commute and wardrobe savings, increased flexibility, comfort, etc.), there are also additional risks associated with it. From workplace safety, to liability exposure and coverage for damaged business property, there are many things to consider if you are going to work from home. There are even “home-based” businesses that involve working outside of your home but may still result in coverage limitations on your homeowners policy.

Workplace Safety

From the perspective of the employer, Workers’ Compensation risks are greater. With the change in the work environment brings the potential for additional hazards, especially since there is not an HR department or maintenance staff on site to mitigate against potential injuries. That leaves the responsibility of maintaining a safe work environment solely on the shoulders of the employee. There are some simple steps you can take to make your home a safe work environment.

It may seem like Workers’ Compensations risks are only something that the employer really needs to worry about, but generally if you are injured in a workplace accident you are only paid a portion of your normal salary. While your medical bills pay be covered if you are injured at work, it can still be difficult to only receive a partial paycheck if you are out of work for an extended period of time, so it is certainly beneficial to avoid injury if possible.

Eliminate Trip, Slip, and Fall Hazards

  • Incidents involving trip, slip, and falls are the second leading cause of Workers’ Compensation claims in the United States. This is why housekeeping is essential.
  • Make sure to keep floors clear.
  • Rugs should have an anti-slip backing.
  • Arrange power chords and communication cables in a manner where they are away from foot traffic and covered.
  • Clean any spills or areas of moisture accumulation immediately.

Ergonomics are Essential

Musculoskeletal disorders (injuries involving the muscles, nerves, tendons, and supporting structures) are common injuries experienced in any work environment. Such disorders include carpal tunnel syndrome, neck tension, and tendonitis. Common causes of these injuries are repetitive movements, overuse of muscles, and prolonged periods of immobilization.

The setup of your work equipment and layout of your office are critical. Keep in mind your physical capabilities and limitations. Adjust your workstation to your body and not your body to the workstation. Think about chairs that offer more support and an adjustable desk so you can stand periodically, in addition to wrist support for your mouse and keyboard.

Fire Protection and Life Safety

  • Fires do not take breaks for employee work hours. Purchase a fire extinguisher and keep it in an easily accessible unobstructed location.
  • Check smoke alarms monthly.
  • Ensure walkways, aisles, and doorways are unobstructed. In the event of a fire, these are your means of escape from a building.

Liability Exposure

Whether you have clients coming to your home or you meet business associates in other locations, if you run a business without a dedicated office space outside of your home it is likely classified as a home business. Some home businesses that people don’t think about when it comes to insurance include selling Mary Kay or other products, customer service or other computer-based jobs, and photography.

Your homeowners insurance will cover your liability exposure if a friend or family member is hurt on your property, however your liability coverage does not extend to business risks. If a client were to come to your home and they slip and fall, your homeowners insurance would not pay out for their injuries.

Some insurance carriers offer optional endorsements that you can add to your homeowners policy to extend coverage to business risks, however the business exposures they will accept are very limited and largely dependent on the frequency of foot traffic in the home. If there aren’t any endorsements you can add to your homeowners policy to cover your business risks, you should consider getting a Commercial General Liability policy or a Business Owners Policy.

It is a good idea to call your agent if you do any business out of your home to find out what is covered, what isn’t covered, and if there are any changes you should make to ensure the correct coverage for your unique situation.

Business Property

Along the same lines as the liability exposure, most homeowners policies also specifically exclude for any property related to business. Whether you use a computer, other software, or you are a photographer and have camera equipment or an artist with paint and canvases, if something happens to cause damage, like a fire or a tornado, that property would not be covered by your homeowners policy since it is used in business pursuits.

If you sell any products out of your home, or even if you travel to other locations to sell (like fairs, farmer’s markets, offices, etc.) those products would also be excluded from coverage on your standard homeowners policy.

You may be able to add some coverage to your policy for business property, but again the options are limited on a personal homeowners policy since that type of policy is specifically designed for personal exposures, not business exposures. There are commercial policies available to cover any contents or property used in your business pursuits.

Commercial Policies to Consider

Some commercial policies that may help protect your business include:

  • Commercial Property Insurance- to cover the workspace, contents, and lost income in the event of a covered loss.
  • General Liability Insurance- to protect your business and assets against claims of bodily injury, property damage, and in many cases personal injury or advertising errors.
  • Commercial Auto Insurance- if your vehicle is used to transport clients, business associates, or business property, you often need it insured on a commercial auto policy.
  • Commercial Umbrella Coverage- to give you additional liability protection to ensure the highest level of protection for your business assets.
  • Errors and Omissions- If you give any sort of advice as part of your business, you could be held responsible for inadequate or incomplete information. An Errors and Omissions policy would cover that risk.

It can be very confusing to figure out what coverage you need to adequately protect your business, so if you have any questions don’t hesitate to call your current agent. Here at Integrity First we have a dedicated commercial agent who specializes in all things commercial and can answer any questions you have and tailor coverage to your specific business.

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Topics: homeowners insurance, home business, side gig, side hustle, gig work, self employed

Written by Alexa Steffes

I am originally from Michigan but moved to Colorado when I was 5 years old. Colorado is my home, but when it comes to sports, my heart is in Michigan. In the fall, we cheer for the Michigan Wolverines and the Detroit Lions (even though the Lions usually lose). I enjoy spending time with my husband, Jacob, and exploring our beautiful state with our two dogs, Brady and Sage. Integrity First truly is different than the rest of the industry.

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