Insurance for Remote Employees and Home-Based Businesses

With the advancement in technology, working from home is easier and more convenient than ever. I don’t know many people that would turn down having a dress code of pajamas, a non-existent commute, surrounded by your favorite furry coworkers. During Covid, not only did we see a huge wave of workers transitioning to remote work, but here in Destin, we had many people move in so that they could enjoy views while working from home.

With tourism and an entrepreneurial mindset, this area one of the best places to open a small business, especially one that is starts from home. According to the SBA, 60% of businesses are started and operated out of the owner’s home. And with Destin storefront space costing a premium amount, one of the most strategic things a local business owner can do is to find a way to work remote. We recently had a customer shut down their storefront of 20 years and move their business to their home so that they could save more money and enjoy a partial retirement.

Whether you’re an employee or owner working from home, you should know how far your home insurance coverage extends to your work along with what business coverage will pay and not pay for.

Here are some common scenarios that we as risk advisors worry about:

• Storm hits and fries a computer and equipment or inventory that is in the garage
• A customer comes to the house and gets injured
• As an employee you get injured on the desk the business provided
• A personal vehicle is damaged doing a business errand
• Your home is damaged, and you no longer can perform business operations

Insurance as a Remote Employee

If you’re an employee working remotely, most likely your employer has General Liability Insurance and Workers Compensation which should cover you and others getting hurt on and during work hours, whether at the office or at home. Your home insurance could also cover equipment like a personal computer, but it usually specifies a max amount (usually around $1,000). If you have devices that are worth more than $1,000, talk to your insurance agent about an umbrella policy or additional coverage. Home or renters insurance may cover injury to guests but is not intended to cover injuries to clients.

Insurance for Home-Based Business

Things get a bit more complicated when the entire business is being run out of your home. If a storm were to hit and knock out your power for weeks, fry your computer, and destroy your inventory, home insurance would NOT cover business impact expenses for most of this. Separate coverages like Business Personal Property Insurance (added to your GL Insurance or bought separately) are needed for the inventory that was destroyed.  Another needed coverage for this type of scenario is Business Interruption Insurance which helps to cover fixed expenses like payroll and utilities during the time that your business is shut down from a disaster.

When getting a quote, home insurance companies are often okay with their customers having a home-based business, if there isn’t any foot traffic. If you need to meet with clients, meet in public or get a storefront. Some of the messiest claims involve customers coming to home-based business and getting injured. Depending on the scenario like a dog bite or an injury from equipment, neither the home or business might pay out.  Neither the home nor business insurance want to pay these claims based on the overlap of risk. But if an employee gets injured in the workplace (your home) Workers Compensation would work the same as any location.

If someone were to hack your Wi-Fi and steal sensitive information about clients or your work, home insurance won’t cover it. You’ll need a separate Cyber Insurance policy to cover lost data and breaches.

If you drive your personal car for business purposes, it could be permissible, but you must tell your insurance company before to make sure they allow it. As an owner of a business, if you let your employee drive your vehicle, this would likely not be covered under your personal auto coverage. If you’re pulling a trailer with business equipment or inventory, none of this will be covered under a personal auto policy and would be better covered on a commercial auto policy with an equipment floater.

All of these coverages are different and dependent on the industry that you’re in. If you have any questions about if what you have is sufficient or correct, feel free to give us a call. We’re one of the few agencies in the area with a wide range of commercial insurance across many industries.

There’s nothing more comfortable than working from home in your pajamas AND knowing that you’re properly covered for potential risk.