Since quarantine began at the start of the 2020 pandemic, working from home and remote jobs have been on the rise. While many have returned to the office, plenty of people have set up permanent home offices.
Many people enjoy working from home. No more commute, more focus, more time with your dogs or cats during the day – working from home comes with a lot of perks. Employers are more open to remote work, even offering hybrid options so employees can spend less time in the car or on the train.
If you’ve invested in a work-from-home setup, you may wonder – is all of this office equipment covered by home insurance? When it comes to home insurance and working from home, the answer isn’t always straightforward. It really depends on your job, what kind of equipment you have, and whether or not you’re self-employed.
You may need additional coverage if you have homeowners insurance and a home business. If you are a remote employee, certain pieces of equipment, like your laptop, might be covered by your employer. Learn more about whether or not you’ll need additional insurance for your home office setup.
Working from home: the new normal
The start of the Covid-19 pandemic forced practically everyone to pivot and find a new way to work. Thanks to advances in technology like strong wireless internet, laptops, and remote VPNs, many businesses were able to continue by allowing employees to work from home.
Generally speaking, if you have a company-provided laptop that gets damaged while working from home, your employer may pay to replace any damaged equipment. This is especially true if your employer-provided the equipment in the first place. If your employer provides a computer, monitor, and headset, and those items get stolen, they can also be covered by home insurance — but the items you pay for yourself, like a printer or desk, might be more likely to fall under your home insurance policy.
It’s important to remember that home insurance doesn’t cover everything one hundred percent. Typically, home insurance policies cap coverage for business equipment. The home insurance policy may not cover the entire value if your home office equipment gets damaged or stolen.
Circumstances are important, too. If you take your laptop to work remotely at a cafe and someone spills a hot latte on it – your home insurance policy will likely dismiss the claim. Remember, even though you’re at home, treating this equipment just as carefully as you would in the office is important.
Understanding homeowner’s insurance
Home insurance policies are designed to provide financial protection for your home and personal belongings. These policies usually include replacement costs for your home and coverage for the loss of personal items.
Keep in mind that standard policies have limits to personal property coverage, and personal property is usually covered at cash value. Home warranties differ from home insurance and don’t cover damages to personal belongings.
So, if you’re a business owner who invested in creating a home office — does that fall under personal property or liability coverage? As a business owner, it may be wise to invest in liability coverage.
Home insurance policies typically don’t cover data loss or loss of income due to other home repairs. Depending on your home insurance policy, your office equipment may only cover up to around $2,000 — or less.
If you’re a business owner who chooses to have in-person meetings with employees at your home, your home insurance policy won’t cover any injuries that may occur on your property. Investing in liability insurance as a home business owner is key.
On the other hand, if you’re a remote employee of a larger corporation and get injured while working remotely, you may be entitled to worker’s compensation. Again, keep in mind what kind of injury may qualify for worker’s comp.
For example, if you take a break from your remote job to run a load of laundry downstairs and roll your ankle, you probably won’t be covered by worker’s compensation.
You may be entitled to worker’s compensation if you develop work-related injuries or ailments, like carpal tunnel. Check with your human resource department to learn more about your employer’s worker compensation coverage.
Does home insurance cover home office equipment?
Sometimes, your home insurance will cover home office equipment under personal property coverage. Remember that personal property coverage is limited, and investing in additional coverage is likely best if you’re running a business from home. Your home insurance carrier protects your property as a residence – not necessarily as a studio or workshop.
If you’re a remote or hybrid employee and something happens to the laptop provided by your employer, you’re employer likely has business liability insurance to cover any replacement or repair costs.
Hybrid employees, in particular, may not need to worry too much about additional insurance coverage for home office equipment. If you’re working in the office three or four days out of the week, your employer likely has the right coverage to protect your office equipment.
Hybrid employees may also have less office equipment in their homes than full-time remote employees. If you’re a hybrid employee, you can probably do enough of your job on a company-provided laptop that’s easy to carry back and forth from home to the office.
Full-time remote workers may have additional monitors, headsets, and other equipment necessary to complete their jobs from home five days a week. In that case, check with your employer about repair and replacement costs under business liability insurance. If you need things like a desk, office chair, or additional furniture, some employees may allow you to expense some or all of those costs.
Expanding coverage for home office equipment
There’s good news if you don’t want to switch home insurance carriers completely. You can add a policy endorsement, or rider, to extend your insurance coverage to include home office equipment.
Adding an endorsement to your current home insurance policy will likely increase your premiums. However, having the right endorsement could save you plenty of money if you’re a full-time remote worker.
There are different types of home insurance policy endorsements to choose from. For example, you can add a Business Pursuits endorsement for clerical, instructional, or sales jobs. This rider is a great option for remote workers who need to add computer monitors, printers, or headsets to their home office setup.
If you’re a full-time freelancer, contractor, or consultant, consider adding a Business Property endorsement to your home insurance policy — a great option for self-employed remote workers. The rider typically extends the coverage of personal property loss from $2,500 to $5,000.
Look at the In-Home Business endorsement if you’re running a business from home with two or three full-time employees. Entrepreneurs typically enjoy around $10,000 in business property coverage. You’ll also receive coverage for loss of income, loss of data, and liability.
The In-Home Business endorsement is for smaller businesses that make less than $250,000 annually. If your home business makes more than that and employs more than three full-time employees, look for the Business Owners endorsement.
When to consider commercial insurance policies
If your home business grows and takes off, it may be a good idea to have some research on commercial insurance policies ready to go. How do you know that your business has outgrown the In-Home Business endorsement?
Similarly to home insurance, commercial insurance protects your company’s physical assets from fire, storm damage, and theft. Commercial insurance policies generally protect your data, client information, and more.
If your home business involves expensive equipment, you’re earning more per year, or you’ve dedicated an outbuilding on your property to your business, it may be a good idea to look into commercial insurance.
For example, if you started a small baking company during the pandemic and now you need commercial-sized refrigerators and professional ovens, investing in a commercial insurance policy might make more sense than adding a rider to your home insurance policy.
If your business has grown enough, or even if you’re unsure, talk to an accountant and commercial insurance policy rep to see if this is the better option.
As you can see, there’s no one-size-fits-all answer regarding home insurance and home office equipment. You may be fine with your current home insurance policy depending on your work and what kind of equipment you need.
If you’re uncertain, take some time to review your current home insurance policy. Based on your remote work situation, do you need to add an insurance rider to protect your home office? Or will your employer handle damages to your laptop or headset?
Home business owners may need more than just regular home insurance when working from home. Research the right home insurance policy endorsement for you, your company, and your employees. Now that you know the right questions to ask, you can determine if your current home insurance policy is enough for your home office equipment.