Homer Smith Insurance Blog

Telecommuting – working from your home or sometimes from an employer sponsored location makes you a part of a growing American phenomenon.  Estimates are there are more than 40 million telecommuters in the US today.  There are benefits to both employees and employers in telecommuting.  Employers reduce their facilities costs as they require less physical space; employees save on commuting costs.  It can be a win-win, however, both employee and employer also face some special insurance considerations.

As a telecommuting employee, you may have gaps in coverage that arise out of your work arrangement. If your employer provides items like fax machines, copiers, computers, monitors, printers, scanners, and smart phones, you may not have the insurance protection you need.  Typically residential insurance policies restrict or exclude coverage for business property and it is just that high end property that could be attractive targets for thieves.  Employers of telecommuters have the same issues.  Understanding that company owned property may not be well covered by a homeowners policy, employers need to review their coverage to assure employer owned equipment is safeguarded and appropriately covered.  

Your homeowners insurance policy that includes liability protection will generally exclude a business-related loss and decisions about "business" can get complex.   Where your homeowners insurance might respond to a household accident involving a neighbor, they might view the same incident differently if it involved a client.  Employers need to be mindful of this as well and make certain their liability coverage will extend to risks wherever their extended offices may be.

While telecommuting may not imply an extensive use of your personal vehicle, it is an area that deserves consideration.   Many instances of job related use could be excluded from your personal auto coverage, such as making deliveries or client calls.

Work related injuries are a very complicated aspect of telecommuting.  Worker’s compensation coverage may not apply to work-related incidents that occur at home.  To illustrate the complications, a telecommuter applied for workers’ compensation benefits when she was assaulted while preparing lunch in her home – an employer-approved office. The workers' compensation carrier denied coverage on the basis the injuries did not occur in the course of employment. The courts ruled that since the employee's home functioned as her work place and lunch was within the course of employment as breaks are reasonable parts of an employee's work duties.  However, a compensable injury must come from a risk inherent to the nature of the employment and since the assault was not connected to the employment there was not a connection between the injury and the employment and benefits were denied.

Whether employee or employer, you should clearly document potential exposure to business losses, including the routine job duties performed in the home, potentially hazardous tasks, business visitors to the home office, the area of the home dedicated as a work area/office, the equipment used in the job and who owns each piece. 

Once there is a good idea of the risk exposures it would be worthwhile to talk with a Washington insurance professional who can help an employee find additional coverage and identify the coverage gaps that may be addressed by the employer. Telecommuting is liberating, but neither employee nor employer should give up important protection.