Do I need business insurance if I work from home?

Professionally dressed business woman working from home.

Working from home can be fantastic – no commute, more flexibility, and working in your pyjamas, what else could you want? But with this freedom comes some additional risks, which is why working from home affects your home insurance. For example, you may be bringing home papers, materials and equipment from work or you may be inviting clients over to your home office. Any work-related property damage or liability claims won’t be covered by your home insurance unless they’re notified and you have the proper coverage. You may need business insurance if you work from home or run a business from your home – talk to your broker to determine if this is the case for you.

Why would your home insurance not cover you if you work from home? It’s pretty simple:

  • Businesses have greater liability risks.
  • Home insurance only covers damage to others as a result of your personal – not professional – actions.
  • Additional property would need to be protected.
  • You didn’t notify your insurance company.

 

What are my insurance options if I work from home?

First, you should check with your employer to see what insurance coverage they offer for employees working from home. This coverage may not cover everything, but it gives you a good idea of where to start when it comes to protecting yourself.

Second, you should talk to your broker and current home insurance company. Some insurers offer a home-based business add-on which will cover work-related property and provide the liability insurance you need. However, it may not be available from all insurers or your type of business may not qualify. If that’s the case, you may need to purchase separate business insurance if you work from home. Your broker will be able to help you find the coverage you need and take care of the research and price shopping.

Do I really need business insurance if I work from home?

Not necessarily. It will depend on your business and your home insurance provider. You may need to switch providers to get the proper coverage or purchase separate business insurance.

If you decide to depend on only your home insurance, you could be paying out of pocket if your business property is damaged (or causes damage) or if you’re sued by a client visiting your home. If you store inventory or use a work computer and it’s damaged or stolen, you could be on the hook for replacing it. If a customer trips walking up to your home, they could sue you – and you’d be responsible for all of the legal expenses. Finally, if you fail to inform your insurer, they can deny coverage or void your insurance. This is especially true if you lie on a new home insurance application.

Furthermore, your home insurance won’t provide any coverage for:

  • Professional Liability (if someone blames you for financial loss because of your professional service or advice and sues you)
  • Product Liability (if a product you sell injures someone or damages their property)
  • Business Interruption (if you’re forced to close your business temporarily due to a mandatory evacuation or covered loss)
  • Cyber Liability (if your company is the victim of a cyber-attack or data breach)
  • Equipment Breakdown (covers repairs or replacement of essential equipment)
  • …and many more protection options available, depending on your business.

Whether or not you opt for business insurance if you work from home is up to you, however, you should inform your home insurance provider and talk to your insurance broker.