Should you update your homeowners insurance if you're working from home?

The coronavirus pandemic forced many employees to leave their offices and work remotely. As our nation enters into a period of recovery, both companies and employees are weighing the pros and cons of returning to the workplace, with some businesses permitting more employees to continue working at home, either part-time or full-time.

As new technologies enable more business operations to be completed in a remote setting, it wouldn’t be surprising to see working from home rise in popularity. Although the "working" aspect of working from home seems pretty cut and dry, homeowners may wonder if this lifestyle change will have an impact on their homeowner insurance policies.

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Does working from home affect your home insurance?

Does working from home affect your home insurance? Yes and no. Generally speaking, a homeowners insurance policy is not designed to cover a home-based business, work completed under part-time or full-time employment or any business conducted as an independent contractor or consultant, according to The Balance. Because of this, some policies also include exclusions related to injuries or incidents that happen on your property while you are completing any business-related activities.

While working from home on a permanent or semi-permanent basis may not directly impact your existing homeowners insurance policy, it may make sense for you to update your homeowners insurance policy or take out an additional policy that’s specifically related to working or conducting business from your home.

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When should I update my home insurance?

Is now the right time for you to update your home insurance? That depends on your current and future employment needs. If you’re planning on returning to in-office work soon, you may not need to investigate home insurance updates. This includes if you’re using a personal laptop and minimal "low-value" equipment when working from home; it’s likely that your homeowners insurance policy will cover these items under your sub-limit. If you’re working from home indefinitely, however, it’s a good idea to start considering your options for updated home and supplementary business insurance.

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If I'm working from home, what insurance do I need?

Depending on your unique situation, you may need another form of insurance in addition to your homeowners insurance policy, per The Washington Post. If you are a full-time employee of a company, the company’s employer business liability insurance should extend to you and cover injuries or incidents that happen to you or company property when you’re working from home.

As a business owner, however, you may need a business insurance policy in addition to your homeowners insurance. Commercial liability insurance is a broad policy most business owners select to cover bodily injury, property damage and personal injury via advertising. If your home-based business has employees, you may need workers’ compensation insurance. A commercial property policy will cover any high-value business equipment that exceeds what your homeowners insurance sub-limit would cover.

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Final thoughts

As working from home becomes more common, it’s important that you understand how you and your equipment are covered under your current homeowners insurance policy. Speak with your current policyholder and your employer to determine where your home and business insurance gaps may put you at risk. This is especially important if you conduct any business outside of your home, as you need to ensure that your policy covers injuries or incidents that occur off of your property.

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