Earlier this year, John Sebak handled an insurance claim filed by someone who was working from home and got into a car accident. The accident destroyed a computer owned by the person’s employer.
“The car insurance didn’t cover it, but their home insurance policy did,” said Mr. Sebak, owner of Sebak Insurance Agency in Natrona Heights. The employee was responsible for the computer, he said, which is why the employee ended up filing the claim and paying the $500 deductible. But it was still cheaper than paying the full price for a new computer.
At a time when more people than ever are working from home and often using company equipment while doing so, insurance agents have been fielding a lot more questions from their clients about potential scenarios where they could be liable for work equipment being used in their homes.
What if their house got robbed? What if they spilled coffee on the computer, or one of their children knocked over some piece of equipment and accidentally destroyed it? “We are in uncharted waters for a lot people and the situations they are in,” Mr. Sebak said.
While remote work has been gaining traction for years, in 2020 it became the new normal for many employees. An incredible 42% of the U.S. labor force now works from home full-time, according the Stanford Institute for Economic Policy Research in Stanford, Calif.
The risk for a homeowner is different than it would be for a business owner. That’s why some homeowners’ policies list operating a home-based business as a violation of terms.
It’s important for home-based workers to understand exactly what their existing homeowners policy covers. But Mr. Sebak said the majority of standard homeowner policies will cover $5,000 worth of business property in the event that it’s either stolen or gets damaged by something such as a fire or a power surge.
For business owners, their coverage is often limited to the business location unless they’ve purchased additional coverage, called riders. Those riders would be most useful for businesses that need to insure tools and equipment for repair work and other services away from the office.
Steve Wilson, a senior underwriting manager at Hippo Insurance Co. in Austin, Texas, said his company has definitely seen an uptick in claims involving mishaps with company equipment being used by employees at home. He offered some suggestions for documenting company assets and making it easier to file insurance claims if need be.
The worker’s first conversation should be with his employer to find out if the company’s policy would cover a loss at the worker’s home. Then, he said the employee should take video or photos of the equipment and contact an insurance carrier to discuss the physical equipment, the worker’s job description and what came out of the initial discussion with the boss. “Use that information as a starting point with the insurance agent,” Mr. Wilson said. “Am I covered? And what kind of adjustment do you need to make, if any, to cover the equipment.”
Workers also should ask proactive questions that address hypothetical situations. ‘What if I spill coffee on the laptop at home? Is that covered and what steps to take if not,” he said. “Also, you should find out if you need to increase your coverage for business and personal items.”
Article By: Tim Grant
Source: Pittsburgh Post-Gazette