By: Iris Khodkar

Working from Home and its Impact on Home Insurance Rates

Tags: Home Insurance, impact, insurance rate, jobs, employer, employee, business, risk, insurance policy, coverage, liability, home policies, side hustle, iris, iris khodkar group, re/max, re/max west realty inc

While every home policy is different, it is unlikely that working from home as an employee would change your home insurance rate. Jobs that actually can be done from home usually involve little more than laptops, inherently making them low-risk activities.

Working for an employer at a desk job does not carry the same risk as running the business itself, so you wouldn’t need to worry about working from home as an employee in most cases. The business risk does not correlate to risks related to your home in most cases.

It is important to note that not every job involves sitting at your desk- such as childcare, hair styling, or pet grooming- but it’s rate to perform those kinds of jobs from home as an employee. People performing those roles from home are usually self-employed, which requires a separate business insurance policy.
If you are working in marketing, finance, consulting, or computer software as an employee, then you are probably in the clear.
 
If you work as a freelancer then it is possible that your home insurance policy needs a change. However, it is crucial to know that many insurance providers in Canada do have a small amount of coverage for small, low-risk businesses being run out of your home. This would include:

If you are running a low-risk side business of such out of your home, then you can likely get by with the added home business coverage if it exists in your policy. That is because most desk jobs are only likely to encounter liability risks- but those liabilities would be attached to your business instead of your home. The story could be different if you use physical tools and materials for your freelance business, though, like sculptors or carpenters.

It is also worth noting that most home policies let you but an add-on for home-based businesses that cover business tools and professional liability, but you’d still need a dedicated business insurance policy if clients visit your home or if the business hits certain level of revenue. There are limits to the add-on policy.

Home Policies Do Not Cover Sole Proprietors Business
Sole proprietors working from home are a but more interesting since a home policy is not enough to service a dedicated business.

It is not simple as insuring your home, setting up a business at home, and putting off insuring your business. Running certain kinds of businesses out of your home or anywhere on your property could introduce tangible risks to your home, not just legal liabilities. This means that your residential home policy could be affected by work in some form, including raising rates.

If you have taken up woodworking as a side hustle, for example, then there might be a set of new and very real risk to your home. In this example, those risks could include:

That is not an extensive list by any stretch, but it does demonstrate how bringing a workshop home- even just in your garage- can raise the level of risk beyond the capacity of a single home insurance policy to handle.
Always check with your insurer to be on the safe side. It is not worth experiencing any curveballs when you need to make a claim.