How does working from home affect homeowners’ insurance?

Businesses across the country have moved many of their professionals into work-from-home arrangements. That has led to some confusion as to who’s liable and whose insurance will pay out in the case of injury or property damage.

Generally speaking, if your business has full-time employees who now work from home, your workplace coverage should extend to them at home. Your insurance would also cover any company property they use at home. It should include workers’ compensation for injuries that happen to them while working, as well as liability coverage for injuries that happen to business-related guests on their property.

A business’ insurance policy may also provide limited coverage if a worker’s personal property is damaged while performing work-related tasks at home.

However, if you have workers whose status has changed during the pandemic, coverage needs might shift. For example, if you have a worker who is now categorized as an independent contractor, then they are functioning as a “business” and will need their own insurance to protect their home office, equipment and other “workplace” liabilities (e.g., if a customer has an injury while visiting their home). That would also be true for a worker who has added a sideline gig.

Even small sales jobs, such as representing a skin care line or selling candles, would likely be considered a home-based business. That means if customers come to an employee’s house to pick up products, their homeowners’ insurance would not pay for injuries that occur on their property.

Some insurance carriers may offer optional endorsements that can be added to a homeowners’ policy to cover these risks.

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