Will home insurance cover a work-from-home arrangement?

It's been more than a month since Canada was put under lockdown inside a bid to flatten the curve. Working at home is just about the new norm, with countless Canadians practising self-isolation. While the economic slowdown has led to major layoffs across various business sectors, it has also resulted in a boost in working at home, and home-based businesses.

One way or any other, COVID-19 has us managing our professional lives from home. Over these unprecedented times, a lot of people have the same question: does my house insurance policy working from home and home-based businesses? To reply to this, we need to start looking at what basic property insurance coverage entails:

What does a fundamental home insurance policy cover?

A basic home insurance policy protects:

• The interiors and exteriors of your house from damages and vandalism
• Your household possessions, such as electronic appliances, furniture, jewelry (up to and including certain dollar amount), cellphones, etc., from theft, fire, flooding, or other damages
• You from liability in the event of accidents inside the house that create physical injury to another person

But so how exactly does home insurance coverage change if you are working at home or running a home-based business?

Working from home

If you're working at home temporarily due to the new coronavirus outbreak, your organization will probably supply you with the basic the equipment to complete your work, such as a company laptop, desktop monitor, and even furniture in some instances.

Generally speaking, company-owned devices are covered beneath your employer's commercial insurance plan. In this case, the worker working at home doesn't have to add extra coverage for business equipment to his/her existing property insurance policy.

“If folks are working at home temporarily due to the COVID-19 lockdown, there is no effect on their home insurance,” says Elektra Hilton, Director of Operations at insurance brokerage HUB Customer Central.

“It is not considered business use when a policyholder may even work in another location and is temporarily working from home. Nothing must be amended on the home policy and there's no additional premium charged.”

On rare occasions, a worker may use their personal equipment, such as a computer, for you to use home. Most property insurance policies come with an additional coverage cap for business property, which can vary between $2,000 to $5,000, with respect to the insurance provider. In most cases, this coverage is enough to safeguard your work-related equipment. But it is better to seek advice from insurance companies.

Even climax not better to talk with individuals person at this time, your job may need you to do so. In that case, then it's vital that you opt for additional liability coverage because if people are visiting your house for professional reasons, the private liability coverage provided by the fundamental property insurance policy will not be valid in case of an accident and subsequent claim.

Home-based business

If you've lost your regular employment because of the coronavirus pandemic, and have chose to begin a home-based business of your, you have to begin by registering your company. It's advisable to opt for business coverage – either as an extension for your existing home insurance policy, or as a separate policy.

According to Hilton, “Most home policies offer automatic coverage for business equipment in your home (i.e. laptop, monitors) for those individuals who are self-employed/own a home-based business. This coverage is perfect for a few thousand dollars (typically $2,000 to $5,000, with respect to the company and property package.”

However, this basic business equipment coverage isn't enough to safeguard a home-based business from public liabilities, professional indemnities, and much more. That's why you'll need a business insurance policy, including the next coverages:

• General Liability Coverage: This coverage would safeguard you from any type of liabilities for physical or financial harm to others caused by your home-based business. For example, it can protect you from claims filed against you for an accident that injured a customer or perhaps a customer when they were at your home for business purposes.
• Professional Indemnity Coverage: Also known as Errors and Omissions coverage, this protects you when a customer or client claims that the service, product, or advice was poor/negligent, and resulted in physical damages, emotional distress, or monetary losses. For instance, a high level doctor running a private practice at home, this coverage protects you from claims of medical negligence that led to the death of a patient.
• Damage to Business Property Coverage: Just such as the property insurance policy that covers damages to the home and its possessions, this kind of business coverage is essential to guard damages to business property. It protects business premises, equipment, inventory, finished products, etc. from fire, flooding, theft, and much more. This coverage varies with respect to the kind of business you take, the kind of equipment and raw materials you use, where you conduct your business. If you're managing a home-based business, you'll still need a property insurance policy to guard your personal possessions.
• Business Interruption Coverage: This type of coverage ensures the continuity of the business income in case of losses incurred because of damages to the business premises, equipment, inventory, products, etc. For example, let's say there is a fire in your home. The business insurance carrier would pay an amount for that loss of business that resulted from damages to your business property.
• Employer Liability Coverage: Should you bring in help being an employee or an intern to help you with your business, this coverage pays for any injuries they might sustain while employed by your business.

Depending around the scale of your home-based business, you are able to choose to either add business coverage endorsements to your house insurance policy or secure another business insurance policy.

“Insurance companies often offer a home business extension around the policy that provides basic coverage at reasonable prices within certain eligibility guidelines for home-based businesses,” says Hilton. “If higher limits or broader coverage are needed, a CGL (Commercial General Liability) policy may be required.”

In short, working from home doesn't impact your home insurance coverage. But you is deserving of in touch with your insurance company, since it might offer a different insurance policy for working from home arrangements. And, if you'd like to start a home-based business, make sure that you go for adequate coverage to safeguard your company from various kinds of damages, claims, and liabilities.