Are You Working from Home Illegally? Better Check Your Insurance
People work out of their homes under all kinds of conditions and always have. But Alex at Shedworking reports that this may be a problem, operating without insurance and possibly breaking the law.
According to research from AXA, 16% of homeworkers employ one or more people yet only 3% have employer's liability insurance. Meanwhile just 14% of homeworkers surveyed say they have business car insurance yet 66% use their cars for business purposes. In both instances this would mean they are operating illegally.
The director of AXA business insurance says:
The number of people working from home has grown by over 20% in the last ten years or so but our research shows that these people take a more relaxed view on insurance than those working from business premises. We appreciate that generally there is no intention to break the law and that insurance is possibly not top of the priority list for many people. However, it is absolutely vital that homeworkers check what they need to be covered for and, at the very least, meet legal requirements.
Now, one might point out that this is not an unbiased source of advice. The separation of work life and home life has become so fuzzy that I wonder how you can tell one from the other anymore. I suspect also that whether you have employees in the home or not makes a big difference.
A Canadian insurance website also notes that homeowners' policies might not have enough coverage.
Generally, your home insurance will cover personal property used for business purposes, but only to a set limit, which is usually $2,000, and only when the equipment is in the home.
And the car?
Just like your personal home insurance isn’t adequate to cover a home-based business against losses, your personal auto insurance will not cover your vehicle if it’s used for business purposes.
I personally have been working from home for 15 years and never gave this a moment's thought. What about you?