What You Need to Know About Working from Home and Home Insurance

If you work from home, it's important to understand how your home insurance works. Working from home generally won't invalidate your home insurance completely, but your home insurance isn't what will protect your business activities. Here's what you should know. 

Are You Allowed to Work From Home? 

Yes, you can generally work from home without worrying about violating your homeowners insurance. You do need to be aware of if the specific work you're doing complies with any local laws as well as the rules of your community. Breaking laws or rules could be a violation of your home insurance policy. That could lead to it getting canceled. Beyond that, your policy will generally say something along the lines that it won't cover anything that happens as a result of business activities. However, your personal activities would still have coverage. 

What Happens with Liability from Your Work? 

Your employer's liability policy will generally still cover you even if you're working from home. This is especially true for computer work since the results of the work aren't really determined by where you did the work. 

A trickier situation is what happens if you have a coworker or client come over and they get hurt while on your property. Your home insurance company might say it was a business visit that isn't covered. You'll need to understand if your employer has a general liability policy. Check to see if it covers all of the company's meetings regardless of location, or if it only applies on your employer's premises. That can help you decide beforehand where to have such a meeting. 

What About Stolen or Damaged Property? 

If you bring a work computer or other equipment home, your employer should have business property insurance that covers it. Some home insurance policies might give you limited protection if your employer holds you responsible for the loss. You'd need to check your policy to be sure. If you happen to use personal property, such as your own computer, for work but also for personal reasons, then your home insurance should cover it like any other personal property. 

What if You're an Independent Contractor? 

If you're an independent contractor, remember that you're the employer. Even though you're the employer, your home insurance still generally won't cover your business activities. That means you'd need business insurance to protect your work. Of course, you'll still need to maintain home insurance to protect your home and personal belongings.