Insurance people, help me out with this

Factual Questions
1

I started a new job last week. I work from home, and one of the requirements in my telecommuting contract is that I have a specific type of endorsement or whatever on my renter’s or home insurance that covers THEIR equipment. I’m their employee, not self-employed or an independent contractor. My employer is in Minnesota, I’m in California.

I was told by my employer that State Farm would have the thingie I would need, called an incidental business endorsement. So, I went to State Farm, got my renter’s policy with the endorsement, blah, blah, blah. Two weeks later, my State Farm agent calls me up and tells me that there was a mistake, I could NOT have the endorsement because I’m not self employed. She referred me to an insurance broker who could maybe help me.

The broker was really confused about my request. She was all, “why would they make you insure their equipment? It’s not yours, you can’t insure it!” Then she said she’d do some research and call me back.

So, can I insure equipment that belongs to your employer, but is located in my home? My employer’s pretty new at the whole teleworking thing, I’m their first one who doesn’t live in Minnesota, and the whole program is less than a year old, so it wouldn’t surprise me if there was some confusion somewhere.

2

Er, make that “can I insure equipment that belongs to my employer.”

3

I’m not an expert here, but my guess is that they’re not looking for specific insurance on their equipment per se. I think the question is whether your renter’s insurance will cover stuff that you don’t own, that happens to be in your apartment.

4

I don’t think so…this is what it specifically says on the “help sheet” my employer sent me regarding insurance:

“Explain that you are looking for a Home Office Endorsement or an Incidental Occupancies Endorsement to provice liability coverage and coverage for personal property for items in the office, such as desks, computers, transcription equipment, etc.”

I asked the insurance broker why that stuff wouldn’t be covered under a regular renter’s policy, and I was told it was because it belongs to my employer, not me.

It’s so weird, because my previous employer provided all my equipment, and they didn’t even care if I had ANY home insurance.

5

Disclaimer: I am not an insurance professional and insurance laws may be different in your jurisdiction. But having encountered a similar situation before, I might be able to help you understand.

IIRC, one of the requirements for being able to purchase insurance is that you have an “insurable interest” in the item being insured. That is, if you yourself stand to personally lose in case of the item’s loss, theft, or damage, you have an insurable interest. You can buy insurance to cover the item.

However, having no insurable interest on an item means you also lack the ability to buy insurance on it. This is why you cannot buy insurance in your name on (for example) your friend’s home. Only your friend can do that for the policy to be valid.

Similarly, you cannot insure items belonging to your employer, which it sounds like you were trying to do. Since the employer owns the items, the employer stands to lose if the items are lost, stolen, or damaged. So, only the employer has an insurable interest in these items and can insure them. But without an insurable interest, you cannot insure them, and the broker was correct in telling you that you could not. The broker didn’t seem to be too good at telling you why, though.

Hope this helps explain why you cannot insure your employer’s (or anybody else’s) equipment, and to repeat: I’m not an insurance professional. Laws may vary in your location. For reputable and current advice on insurance in your location, see a local insurance professional.

6

[QUOTE=Spoons]
Similarly, you cannot insure items belonging to your employer, which it sounds like you were trying to do. Since the employer owns the items, the employer stands to lose if the items are lost, stolen, or damaged. So, only the employer has an insurable interest in these items and can insure them. But without an insurable interest, you cannot insure them, and the broker was correct in telling you that you could not. The broker didn’t seem to be too good at telling you why, though.
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However, since the items are in his house, wouldn’t he have an automatic insurable interest in them due to liability? Surely if you rent a TV and it gets stolen, you still owe the company a TV, and your renters insurance is the first stop for getting the company reimbursed for their TV. Another example is various types of general liability insurance that cover your liability for other’s property and health.

7

[QUOTE=Spoons]
Disclaimer: I am not an insurance professional and insurance laws may be different in your jurisdiction. But having encountered a similar situation before, I might be able to help you understand.

IIRC, one of the requirements for being able to purchase insurance is that you have an “insurable interest” in the item being insured. That is, if you yourself stand to personally lose in case of the item’s loss, theft, or damage, you have an insurable interest. You can buy insurance to cover the item.

However, having no insurable interest on an item means you also lack the ability to buy insurance on it. This is why you cannot buy insurance in your name on (for example) your friend’s home. Only your friend can do that for the policy to be valid.

Similarly, you cannot insure items belonging to your employer, which it sounds like you were trying to do. Since the employer owns the items, the employer stands to lose if the items are lost, stolen, or damaged. So, only the employer has an insurable interest in these items and can insure them. But without an insurable interest, you cannot insure them, and the broker was correct in telling you that you could not. The broker didn’t seem to be too good at telling you why, though.

Hope this helps explain why you cannot insure your employer’s (or anybody else’s) equipment, and to repeat: I’m not an insurance professional. Laws may vary in your location. For reputable and current advice on insurance in your location, see a local insurance professional.
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I understood all that perfectly. :slight_smile: Hence my question…my employer claims that I CAN insure their property, and that’s conflicting with what I’m being told by the insurance agents here.

Here’s the recently updated insurance requirements that my supervisor sent me when I informed her of the situation:

8

Again I have trouble understanding why anybody would think it was impossible to insure. This seems pretty standard to me. I rent medical equipment and I rent a musical instrument, and in the former case I signed something stating that if my insurance fails to cover damage or theft I am liable for the device and in the latter I am actually paying extra to waive such liability. What, if anything, makes work-at-home equipment different from renting it for a negative amount of dollars?

Analogy that you can’t insure somebody else’s life in your name is flawed. No, you can’t insure Joe’s life in general, but you can insure yourself against a lawsuit in case you happen to intentionally or accidentally kill or maim Joe. I don’t know of any sane insurance agency that would underwrite a policy covering liability in regards to a particular person (especially one named Joe), but it’s not fundamentally impossible.

9

I might suggest you go to another insurance broker. I was an insurance broker (in Canada, so the laws will vary), and your situation is perfectly insurable under your homeowner or renter policy.

10

[QUOTE=GingerOfTheNorth]
I might suggest you go to another insurance broker. I was an insurance broker (in Canada, so the laws will vary), and your situation is perfectly insurable under your homeowner or renter policy.
[/QUOTE]

Yeah…I’ve called another broker, and this lady thought that it was totally possible, though the last item in the list might be difficult (the “[Employer] listed as an additional insured (ensures [employer]’s liability exposure is protected under the policy)” one), but she’s going to research it and call me tomorrow.

It’s pissing me off, my employer acts like it’s completely standard, yet everyone I’ve called is treating it like a really bizarre request.

The first broker I called actually tried convincing me that I meant I needed professional liability insurance, like if I typed a wrong medication and somebody died because of it (I’m a medical transcriptionist). Umm…no, I’m not liable for that, the doctor who has to read and sign off on whatever I typed is.

11

Mishell: It’s unlikely your employer is concerned about the few thousand dollars of office equipment you’ll be using in your home. Rather, they’re concerned about liability for actions you might take while working at home on their behalf.

Picture your obnoxious neighbor visiting your home office, tripping over your fax machine cord, and banging her head on your copier. She knows you’re working at home on behalf of Megacorp. So she can sue you and get peanuts–your homeowner’s insurance won’t even cover you, because you were using your home as an office–or she can sue deep-pocketed Megacorp. Hmm, think think.

They want you to have a home office endorsement so that your policy will kick in first. This is the protection against third party liability or property claims that they’re asking for.

As an aside, they’re suggesting that you may want to cover your personal property in your home office, since your homeowner’s/renter’s insurance won’t. But that’s primarily your concern.

I suspect that this is why your insurance agent was confused.

12

[QUOTE=Mishell]
Yeah…I’ve called another broker, and this lady thought that it was totally possible, though the last item in the list might be difficult (the “[Employer] listed as an additional insured (ensures [employer]’s liability exposure is protected under the policy)” one), but she’s going to research it and call me tomorrow.
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The employer (owner of the equipment) is listed as an additional named insured or as the lessor of the equipment. Like a lienholder.