Is Contractors Insurance Required if I Work from Home?

Working from home certainly has its perks but it also brings up a lot of questions. Whether you run your own business or are part of a larger remote practice, you could face certain liability risks when operating outside of your home. Are you considered a contractor? If so, do you need contractors insurance?

Remote workers are not necessarily contractors, or are all self employed individuals. If you are a contractor working from home, you may need contractors insurance depending on the nature of your work.

Contractors insurance combines a variety of coverages to protect contractors from dangers they may face in their day to day work. This includes claims of bodily injury such as if a client is injured on your property, property damage and personal or advertising injury.

For example, say you are a hairstylist who is working out of your home. While cutting a client’s hair, your hand slips or they jolt you and the sharp scissor blade cuts them. In this case, contractors insurance may be able to pay for the client’s medical bills (such as stitches, a doctor’s visit, etc.) and protect you in case the client decides to sue.

Beyond on-the-job injuries and damages, there is quite a bit that can happen in the course of your business. For instance, if you make any claims in your advertising such as making accusations of a competitor being a fraud, that might be a suable offense, depending on what kind of spin your competitor's lawyers can put on it. With some form of business or contractors insurance, you'll be covered for any expenses arising from that lawsuit. Without that protection, your competitor could very well wind up with the deed to your home.

Errors and omissions, or professional liability, is another major concern, depending on your line of work. For a graphic designer, it is unlikely that you will ever need this form of insurance. However, if you work in consulting in any capacity, your job is effectively to dole out advice. If someone is injured as a result of that advice, you may be held responsible for that.

Some work-from-home contractors need considerably more insurance than others. Consider the hazards that you face in your line of work. Then, determine whether you feel adequately covered without contractors insurance. Speak with your insurance agent if you have any questions about whether or not you need contractors insurance while working from home.

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