Today’s home offices far surpass their predecessors. No longer simply furnished with desks, file cabinets and sticky notes, modern home offices often serve as extensions of a jobsite workspace, complete with expensive computers, monitors, scanners and printers.
The number of full-time, home-based workers has grown in the U.S. In 2010, 5.8 million Americans (4.3 percent of the total workforce) worked from home, according to the U.S. Census Bureau. That number rose by 1.6 percent (or 4.2 million people) from the previous decade.
Have an office in your home? Protect it. Whether you work full time at your house or occasionally bring work home, you need the proper insurance. Just because you work at your house doesn’t mean your home insurance policy covers your equipment or machinery. In fact, it probably doesn’t.
Here are a few options for home office protection.
Your homeowners insurance policy
You rely on your homeowners insurance to safeguard the structure of your house and its contents, why not use the same policy to cover your home business equipment? Actually, a standard home insurance policy — if it protects business equipment at all — typically limits the replacement value of business equipment to at most $2,500. For many, that’s not enough for a laptop and printer, much less a desktop computer, scanner and whatever else you may need to get the job done.
If your home office represents an extension of your regular office space, you can cover it with homeowners insurance, but understand that your policy has strict limits for high-value items such as electronic equipment. If you work from home full time, it’s another story. You may have to purchase an endorsement to raise coverage limits. Let your agent know about your home office and get professional advice on how to proceed.
Home policy endorsement
If you run a business from your home, even if you simply sell candles or print stationary, tell your insurance provider. Filing a home insurance claim for a business item could put you in hot water with your carrier and your claim could be denied.
Conversely, purchasing a home policy endorsement could strengthen your relationship with your provider and raise your limits for business equipment or inventory. Typically an endorsement will increase limits from about $2,500 to $5,000, but it can boost your limit to $10,000.
Homeowners liability endorsement
Though a policy endorsement raises limits for property and equipment, it doesn’t help with liability. A liability endorsement can raise your legal protection for slip-and-fall accidents that may arise from reception of business deliveries or clients on your property.
This additional liability coverage only is available for businesses with few on-site customers. If your business relies on regular clients coming to your house (if you’re a hair stylist, for example) your carrier most likely will deny coverage.
In-home business or business owners policy
An in-home business policy provides more extensive protection for property and liability. It also typically includes coverage for lost documents and important records, lost income should your house become damaged, and liability for certain products and services. This policy is only available if you have fewer than three full-time employees, and its limits typically are $10,000. If you need more protection, check out a business owners policy, or BOP.
No matter what kind of work you do, the space in which you complete it probably matters to you. As needs for business equipment and machinery evolve, choosing the proper way to safeguard your workspace can get tricky. Nonetheless, fully covering it can keep your job happy, healthy and productive. Who wouldn’t want that?
By Katherine Wood