Aided by technology, many people have started working from home. However, the Homeowner’s policy doesn’t cover business activities, so where can you get coverage? When can an endorsement be made to your Homeowner’s coverage to add the coverage? When can’t coverage be endorsed to your Homeowner’s policy?
In-home businesses are becoming a common occurrence, thanks to technology. With the ability to videoconference with anyone at anytime over the internet, the business world has become a smaller place—and is allowing more people to work from home. Some people can connect to their company's servers and work from home. Others use the new technology to sell their wares online, using their home as there head office and/or warehouse. And still others run non-internet based operations, such as daycares and pet grooming. So when does a home business require an endorsement to the Homeowner's policy, and when does it require a separate commercial policy?
Most Homeowner’s policies do not automatically cover any business property or liability at all. However, most Homeowner’s policies give you the option to endorse your policy to cover an in-home business exposure. Typically, that endorsement will extend coverage from your Homeowner’s policy to cover incidental business liability and cover your business personal property as well. However, this endorsement is typically reserved for in-home offices only. An example would be if you had a company computer at home that could connect to your company’s server and allow you to work from home—making calls, fill out reports, etc.
Typically, things get more complicated if the entire business is ran in-home. Businesses such as the aforementioned daycare and pet grooming probably wouldn’t be able to be covered by your Homeowner’s policy. This is because the entire operation is based from the home, instead of being an incidental exposure. Also, there are extra coverages that those types of businesses would need (E.g. Business Income, animal bailee coverage, molestation and misconduct coverage) that are not even offered for homeowners.
In-home businesses are becoming more common, and the risks are becoming more complicated. If you think you may have any in-home business exposure, make sure to contact your insurance agent and have a discussion about the specific risks of your situation and your insurance options!