Today, with many people forced to work from home, one of the questions people ask a lot is if a home office is covered by insurance. For instance, will your printers, desktop computer, keyboards, iPads, etc., all the essential tools you need to work, even if it is in the kitchen, be covered?
The problem with answering this question is that not much time has been given to thinking about insurance with the abrupt switch to working from home. That’s why so many people have this question without knowing what the insurance they currently have covers.
Have Homeowners’ Insurance?
Many people reading this may already have homeowners insurance, and that’s the first step to answering this question. You will want to read the policy to determine what is and isn’t covered. Many homeowner’s policies will have a few liability exclusions, mainly covering property damage and bodily harm arising from doing business at home. That’s why the standard policy will not cover home-based businesses or a situation where you’re working from home.
Now, for the most part, a homeowners policy is meant to protect mainly personal property, i.e. items that are of personal use. So, any items lost which are of personal use will be covered by the policy. However, minute personal property, which is also used for business purposes and may be destroyed, has its limits. Usually, the limits stipulate how much the insurance company will pay to replace it.
Your standard homeowner’s policy has a $2500 limit for mainly what’s defined as “business personal property.” If this property is damaged or lost while it is in your residence, then the next question is, was it burglarized or was there a mishap on the residence. Also, would the $2500 be enough to replace all items? The easy answer to this is most likely “no.”
Coverage for Business Equipment Used In A Home Office
A lot of this depends on the “how” or the “who” purchased the computer, desk and printer. If your items were purchased by your employer, which goes for most other business equipment in your home, it should be covered by the employer’s insurance. It depends on the language of the employer’s commercial or business insurance policy that covers these items.
In most cases, if a full-time employee is now forced to work from home, they may be covered by their employer’s commercial business insurance policy. However, that’s something you’ll need to verify with HR, primarily to determine what protections are extended to employees working from home.
If protections under the employer’s policy are limited, you may have to read your policy or speak with an agent to find out what isn’t covered under the current homeowner’s policy. Now, if there is limited coverage for business purposes, you might want to get one of the four possible types of endorsements added to your homeowner’s policy or maybe buy a new BOP. Any one of these options should provide the missing coverage.
Contact James Little Today if you have questions about your insurance policy.