Does homeowners insurance cover working from home?

Home insurance covers your laptop and other belongings you use for work, but only up to your policy's limit. You may need to purchase extra coverage for an at-home business.

Kara McGinley

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Kara McGinley

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

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Although there’s no such thing as “work from home insurance,” homeowners insurance does cover most personal property, including business equipment, but only up to your policy’s coverage limit, which is typically $2,500 for business and work equipment.

If you have an employer but you work from home, your employer will likely cover your work laptop and equipment since they’re usually the ones who technically own it, however it may depend on company policy. If you run an at-home business, you may need to purchase additional coverage.

Key takeaways

  • Your homeowners insurance only covers your personal property, including your work equipment. Standard home policies have a sublimit of $2,500 for business equipment.

  • If your work equipment is owned by your employer, your employer will likely pay to replace or repair any damage.

  • If you are self-employed or own an at-home business, you may want to consider adding business property coverage or buying a standalone in-home business insurance policy.

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Does homeowners insurance cover working from home?

If you own your own work equipment, the personal property coverage component of your homeowners insurance policy can reimburse you if your equipment is stolen or damaged by a covered peril. But homeowners insurance has coverage limits, meaning the maximum amount your insurer will reimburse you if your belongings are damaged. A standard homeowners insurance policy typically has a sublimit of $2,500 for business equipment, which may not be enough if you have your own at-home business or home office.

Below are a few examples of types of damage that your personal business property would be protected against. 

  • Fire

  • Certain types of water damage

  • Smoke damage

  • Burglary

→ Learn more about what homeowners insurance does and doesn’t cover

Does homeowners insurance cover full-time employees?

Homeowners insurance covers your personal property, but no one else’s, not even your employer-owned work equipment. If your employer owns your work equipment and you damage it while working from home, whether or not your employer will pay to repair or replace it depends on your company policy and the circumstances of the damage. Some companies may pay to repair or replace damaged equipment by paying out of pocket or through their insurance. Other companies may require you to pay for it if they find that you are liable for the damage.

If you are found legally liable for damage, your homeowners insurance personal liability coverage may help cover any legal expenses you accrue if your employer sues you for damages. That said, liability coverage has exclusions, and your insurance company may consider “damage from business pursuit” to be an excluded event.

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Do I need additional insurance if I work from home?

If you’re looking for extra coverage because you're self employed or have an at-home business, you typically have three home business insurance options. Which coverage you need will depend on how much work equipment you have, what your job is, and the size of the business.

1. Business property endorsement

  • Best for self-employed,  full-time freelancers, independent contractors, and consultants 

  • Increases your existing homeowners insurance policy’s sublimits on business equipment 

  • Extends coverage sublimits to $5,000 instead of the standard $2,500

2. In-home business insurance

  • Designed for home businesses that typically have two to three employees and make less than $250,000 a year

  • A standard in-home business policy contains $10,000 in business property coverage, liability protection, income replacement, and data breach coverage.

3. Business owners policy

  • Designed for larger scale at-home business operations — typically businesses with over three employees that earn more than $250,000 in revenue a year.

  • BOP works best if you want to group a number of different coverages under one policy, and need more than $10,000 in personal property coverage. If you have employees who work out of your home, you’ll also need a worker’s compensation policy.

Can I deduct home insurance if I work from home?

Typically, homeowners insurance is not tax deductible, but if you work from home and have a home office, you may be able to deduct a percentage of your homeowners insurance. Just how much of your premiums you can write off depends on what percentage of your home you use for business. 

Here’s an example.

Say 10% of your home’s square footage is used as your home office, then 10% of the amount you paid in premiums for the year could potentially be deducted from your taxes.

There are caveats though, including the stipulation that your office must be a specific room or confined to an area used only for business purposes.

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Author

Senior Editor & Licensed Home Insurance Expert

Kara McGinley

Senior Editor & Licensed Home Insurance Expert

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Kara McGinley is a senior editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

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