What to know about property insurance when you work from home

A woman sitting on the couch, working on her computer

With entrepreneurship on the rise in Canada, some professionals who have been laid off from their corporate jobs are choosing to start their own business and work from home. While running a business out of your home helps you save money when you’re getting your business off the ground, what many are forgetting to consider are the possible property insurance implications.

Property insurance for your principal residence and your business are two distinct things. When you choose to work from home, it’s a good idea to discuss it with your home insurance provider to make sure you’re adequately covered.

Protecting your business

Your home property insurance alone most likely isn’t sufficient to cover property owned by your business. If you’re running a web-based business, this may not be a big deal, but if you’re running a business that offers goods or requires expensive equipment, ensuring you have adequate property insurance is paramount. While some coverage is typically offered through your existing property insurance policy, it’s usually not enough to meet the needs of your business, leaving you woefully underinsured.

Furthermore, your property insurance usually doesn’t protect you if you take work property outside your home. For example, if you take your work laptop to a coffee shop and it’s lost or stolen, you most likely won’t be covered. You’ll need to purchase an insurance policy specifically for protecting your business and its property to be protected in these instances.

Liability

Your property insurance policy typically comes with liability insurance. For example, if someone slips and falls on your front porch during the wintertime, liability insurance should protect you in that instance. However, that liability coverage typically does not extend to your business. If you regularly have clients visits on your property and a client is injured on your premises, you could be open to being sued back to the stone age. In this instance, you’ll need to purchase general liability insurance for your business in order to protect yourself and your business.

Other coverage you may need

The insurance needs of a business can vary greatly, depending on the goods and services it offers. Each business type comes with its own unique risks that will need to be protected against through insurance.

For example, if you’re working in the financial industry as an accountant or financial advisor, you’ll want to look into errors and omission insurance. Likewise, if you’re a real estate agent, you’ll want to speak with your real estate brokerage and insurance broker and gauge what your insurance needs are since they aren’t always obvious at first glance.

Even something as simple as running a hairdressing salon out of your home can require business property insurance. For example, if you perform massage therapy from your home and injure someone, they could sue you. By having adequate insurance, you’ll ensure your livelihood, your business, isn’t at risk.

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