Why Standard Homeowners' Insurance May Not Offer Adequate Protection For Technology Freelancers Working At Home
Technology has allowed many people to earn a living from home. However, many people who work from home lack appropriate home insurance coverage for their business-related risks. The assumption is that homeowners' insurance covers home-based businesses too, but this isn't usually the case. For example, if you work in the technology industry, here are some of the risks your homeowners' insurance may not adequately cover:
Depending on your line of work, you may be storing valuable data that you wouldn't want to lose at home. Unfortunately, standard homeowners' insurance doesn't cover lost data. Therefore, you can experience a devastating financial loss if you lose considerable data, and you didn't have the right insurance.
Consider graphic design and coding, two examples of the most profitable home-based businesses. Both of these involve storing valuable data. When you lose such data, you damage your reputation with your clients, lose the expected pay, and waste the time taken to come up with the work. Having appropriate insurance may not prevent data loss, but it may compensate you for the damages you may experience.
Lost or Damaged Equipment
What do you use in your online-based home-based business? Typical machines and equipment include computers, printers, cameras, fax machine, data storage devices (such as memory cards), and many others depending on your chosen field. All of these things cost money, but they aren't usually covered by standard homeowners' insurance. Therefore, don't expect compensation from your homeowners' insurance carrier if a burglar carts away your state of the art computer or water damage destroys your printer.
Even if you do most of your business online, you may have to engage in some related activities offline. For example, you may engage a delivery person to deliver printed cards to your clients, meet with prospective clients in your home office or even call technicians to your home if your equipment breaks down.
If any of these people are injured in your home, you may be held liable for their injuries. Although homeowners' insurance usually covers such liability, your carrier may not settle your claim if it learns that the victim was in your home for business purposes.
In some cases, you may have coverage, but at a very low minimum that may not adequately cover your losses. The prudent thing to do is to sit down with your insurance agent and discuss your situation. Consider your potential losses, such as the value of your machines and equipment, versus the available coverage before making a decision. If the coverage isn't adequate, you may have to endorse your existing policy or buy separate coverage for your business-related risks.