Work from home? Insurance for home-based businesses and employees

Many have grown accustomed to the work from home life in recent years. More Canadians want to work remotely, which provides opportunity for digital nomads who seek a flexible work-life balance. Remote work allows for flexibility in scheduling, more time with family, and increased productivity during peak hours.

If your morning commute is a direct route from the coffee maker to your home office, this blog is for you! Below will outline how working from home affects your insurance.

Key differences in work from home insurance coverages

The main difference in home-based work insurance policies is simple: do you operate a business based out of your home? Or, are you an employee that works from home on a regular basis?

If you are the latter, working from home with a company laptop is relatively low-risk. While employers will encourage their workforce to take measures to protect company property, such as:

• Locking company devices when not in-use to protect sensitive information,
• Ensuring client files remain confidential, and
• Keeping devices in a safe space and locking your doors when you leave home.

These types of positions (such as individuals working in professional services) present relatively low insurance risk. Employers will often outline the above precautions in a work from home policy.

If you are an employee who works from home, your employer likely has a commercial liability insurance policy. This policy often covers stolen laptops, but check with your employer to confirm what it includes. An insurance broker can advise you if you need to make any changes to your existing home insurance policy.

I am a business owner that operates my company from home

If you are a business owner who operates a business from your home, your home insurance policy will not cover your operations. This includes home-based businesses such as:

• Registered Massage Therapy
• Osteopathy
• Daycare
• Professional services (i.e. marketing consultants, accountants, architects)
• Car detailing services
• Educational services
• Amazon or other eCommerce merchants
• Web developers
• Estheticians
• Hairdressers
• Pet care (i.e. pet sitters, dog walkers, groomers)

These operations, particularly those with clients entering and exiting your home and valuable equipment increase the risk for potential liabilities. If you operate a business like those listed above, you should inform your insurance broker. Regardless of if you work part time or full time, it is important to obtain insurance that covers your business needs.

What types of insurance should I have if I operate a business from home?

Much like businesses, no two insurance policies are the same. An experienced insurance broker will learn about your business and create a customized policy that protects you from unique risks. Depending on the nature of your business operations, an insurance broker may suggest a policy that provides coverage such as:

• Business property insurance
• Commercial car insurance
• Commercial liability insurance
• Cyber insurance
• Errors and omissions insurance (also known as professional liability insurance)
• General liability insurance
• Product liability insurance

Can I write off insurance as a business expense?

Owning and operating a business comes with a number of expenses. Though these expenses vary depending on the nature of your business, they can add up. If you operate a business in Canada, the Canadian Revenue Agency (CRA) outlines that “You can deduct all ordinary commercial insurance premiums you incur on any buildings, machinery and equipment you use in your business.” However, it is always best to consult your accounting firm on what expenses you can write off.

For more information on business expenses and what is eligible for write offs, see here.

In conclusion, work from home insurance is an essential protection for individuals who have transitioned to remote work. It offers coverage for risks, such as property damage, liability, and cyber threats, that are unique to the home office environment.

If you work from home, it is important to speak with an insurance broker about work from home insurance. This applies to freelancers, self-employed individuals, and employees. Connect with a Gifford Carr insurance professional to find the right policy that fits your needs and enjoy the comforts of working from home.

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