Photo of a sleek, modern home office that illustrates the concept of home offices affecting homeowners insurance coverage.

How Your New Home-Office Could Become an Insurance Headache

In 2020, there was a surge in home-office constructions throughout Southern California. While the primary reason for this transition was the emergence of COVID-19, it was also reflective of shifting opinions on workplace culture. As a result, employees across a wide variety of industries will not be returning to the office. If you’ve recently made the switch to remote working, the decision may lead to confusion regarding your insurance obligations. In fact, you may find yourself wondering: “Is my business and home office actually covered by my homeowner’s insurance policy?”

We think that’s a great question! In this article, we’re going to provide the answer, explain how your home office could impact your homeowner’s insurance policy, and provide tips to help you stay protected. Let’s get started!

3 Key Insurance Considerations for Your Home Office

There are a variety of factors that influence coverage for your home office. Start by asking yourself the following questions:

Are you storing records and other business information in your home?

Modern record-keeping often involves far more than a few pieces of paper in a filing cabinet. Business information can include maps, drawings, computer printouts, and potentially even handwritten notes! You should also consider any and all data saved on devices within your home. If you’re storing significant amounts of business information, consider requesting an endorsement to reimburse you for the loss of important papers and records.

Do you meet with employees or clients from your home?

If you regularly conduct business from your primary residence, you could be facing serious liability. Every insurance policy is different, but most homeowners’ contracts don’t offer any protection for third-party injuries sustained during activities related to your home-based business operations. For example, if you receive a package addressed to your business and the mail carrier slips on your front steps, it can be grounds for an insurer to deny your claim. Your insurance provider will likely determine the third-party was visiting your home for a commercial purpose, and therefore the resulting accident is outside of the scope of your policy.

How expensive is your business property and does it now exceed the value of your homeowners’ insurance policy?

Your insurance provider differentiates between your personal property and business property. In most cases, your homeowners’ insurance will have a maximum coverage amount of $2,500 for business property. If you’re unsure what qualifies as business property, start by considering all items such as professional clothing, office supplies, print/copy machines, furniture, and computers that are primarily for business purposes. If the value of these items exceeds $2,500, it’s very likely that your home-office is underinsured and could benefit from an amendatory endorsement.

Final Thoughts

We hope that this article has helped you understand how your home office could impact your homeowners’ insurance coverage. If you have recently suffered a loss to your personal or business property, do not hesitate to contact us to discuss your claim. Our experts would be happy to review your situation and provide guidance for the claims process.

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