As technology continues to advance, it becomes increasingly more practical to operate a home based business.  We’re also seeing numerous businesses offering their employees the option to work remotely, at least part time.  Are you working from home on a routine basis, or even occasionally?  If you are, did you ever consider whether you have the right insurance protection?

If you’re like nearly everyone we’ve talked to, you’re relying on your homeowners insurance to protect your home office in the event of a claim.  Unfortunately, the standard homeowners insurance policy could be leaving you with major gaps in your coverage.

What Is Covered (it’s not much)?

  • Most homeowners policies provide a small amount of coverage for business property (think computer, printer, tablet, telephone, desk, etc.) while it’s in your home.  The standard amount of coverage is $2,500
  • Take that business property out of your home, and coverage drops to a mere $500

What’s Not Covered?

  • If you’re operating your home based business from a structure, such as a barn or garage, that’s not attached to your house, it’s very likely your homeowners policy does not provide any coverage for the detached structure
  • If you earn more than $2,000 per year from your home based business, chances are, your homeowners policy does not provide any liability coverage to protect your business… meaning you could be paying out of your own pocket if someone slips and falls while on your property
  • Violation of intellectual property laws, infringement of a copyright or trademark for anything on a website, and workers’ compensation are all examples of claims that would be excluded by the standard homeowners policy
  • Business Income and Extra Expenses aren’t covered by the standard homeowners policy:  would your business suffer a loss of income or incur additional expenses if you couldn’t operate out of your home as a result of a loss?  If your answer is yes, you would need Business Income and Extra Expense coverage

This list just scratches the surface on the number of exclusions found in the standard homeowners policy related to home based business, or those working remotely from their home.

If you have a home based business, your insurance needs are unique and complex.  Make sure you’re working with a professional, knowledgeable Insurance Advisor that can help you structure a comprehensive insurance plan to protect you personally, as well as your business.

Working remotely presents its own set of challenges.  What happens if a delivery person slips & falls at your home?  Your homeowners insurance company and your employers insurance company could both deny the claim… leaving you on your own.  This is why it’s so important to talk with your Insurance Advisor about your exposures when working remotely.