Does homeowners insurance cover working from home?

Homeowners insurance covers your laptop and other belongings you use for work, but only up to your policy's limit. You may need to add an endorsement to your policy to extend coverage to your work equipment if you run an at-home business or work freelance.

Kara McGinley

Kara McGinley

Published September 30, 2020

KEY TAKEAWAYS

  • Your homeowners insurance only covers your personal property, including any 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

  • You may be able to write off a certain amount of your premiums if you have an in-home office, but you must meet certain conditions

Homeowners insurance is financial protection for your home, personal property, and assets. As more and more businesses and jobs become remote, you may wonder if your work equipment is properly protected in the event that the unexpected happens.

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.

That said, if you have an employer but you work from home, you might find that your employer will actually cover your work laptop and equipment since they’re likely the ones who technically own it, however this may be circumstantial and depends on company policy.

If you are self-employed, or run an at-home business, depending on the size of your operation and the value of your work equipment, you may want to consider adding an endorsement to your homeowners policy to extend your existing coverage, or you may even want to buy a standalone in-home business policy. If you freelance here and there, or have a side hustle, your personal work equipment is likely already covered by the standard personal property coverage in your homeowners policy (up to your policy’s coverage limits).

IN THIS ARTICLE

Am I insured to work from home?

Working from home is becoming more and more common, but that doesn’t necessarily mean you need to worry about purchasing extra protection for your work equipment. If you have an employer who provided you with your work equipment, your employer will likely cover replacing or repairing your work computer or other devices. However, this can vary depending on company policy, so you should double check with your employer about what they will and will not cover.

If you own your own work equipment, homeowners insurance can reimburse you for losses, but it depends how much your equipment costs. 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.

Does homeowners insurance cover my employer-owned equipment?

Homeowners insurance covers your personal property, but no one else’s, including 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 — it all really depends on your employer’s policy.

If you are found legally liable for damage, your homeowners insurance personal liability coverage may help 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 business insurance if I work from home?

If you’re looking for extra coverage because you are self employed or have an at-home business, you typically have three options: adding an at-home business endorsement to your home policy, purchasing an in-home business policy, or buying a business owners policy (BOP). Which coverage you need will depend on how much work equipment you have and what your job is.

  • Business property endorsements: This endorsement is best if you are self-employed, a full-time freelancer, an independent contractor, or a consultant. Business property endorsements increase your existing policy’s sublimits on business equipment — by adding an at-home business endorsement to your home policy you may be able to extend coverage sublimits to $5,000 instead of the standard $2,500.
  • In-home business insurance: In-home business insurance policies are 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.
  • Business owners policy: Business owners policy is 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. For example, if 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 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.

Insurance Editor

Kara McGinley

Insurance Editor

Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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