Does Working From Home Affect Homeowners’ Insurance?

Working from Home is the “New Normal”

Many businesses in Maryland and D.C. (as well as across the nation) still have employees working a significant amount of time at home. There’s a lot of confusion about who’s liable, and whose insurance pays out, if an employee is injured or there’s property damage.

Generally speaking, if your business has full-time employees working from home, your workplace coverage should extend to them at home. Your insurance should also cover any company property used by the employee at their 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. You might be wondering, “What happens if my employer doesn’t have workers’ compensation and I get injured?”  We did a 2-Minute Tuesday Brief (a video question and answer series) about this topic.

Small changes make a huge difference

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 an employee who’s now categorized as an independent contractor, then they are functioning as a “business” and they 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). This same is true an employee 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.