In 2004, over 20 million Americans did some work at home as part of their primary jobs. That number has almost certainly increased since then. Anyone who works from home - whether it's a home-based business or home office - should think about what would happen when a disaster hits your home.

Prepare

You've heard the old saying and you know it's true. A disaster can strike at any moment. You need to be ready for it:

  • Check your property insurance. Your homeowner's insurance may or may not cover business-related property, like computers and equipment. If you’re a home-based employee, it m ay not cover equipment that doesn't belong to you. Talk to your agent to see if you have the proper coverage and enough of it to cover your losses
  • More insurance! Look into business interruption insurance. It will help you financially if the disaster temporarily puts you out of business
  • Make an inventory of your business property and equipment. Write down model names and numbers and serial numbers. If possible take pictures of everything
  • Protect your important documents. Paper documents should be kept in water-tight and/or fire-resistant containers and in an area where the threat of fire and water damage is low. If possible, make copies of your records and store them away from your home. Important papers include tax returns, customer lists, personnel files, financial records, etc.
  • Protect your data. Computers are used in practically all businesses today. Copy or backup the data stored on your computers on a regular basis, like weekly or monthly. Use CDs/DVDs or flash drives to copy your files, and store them away from your home. Or, look into an online file storage service
  • Got power? Anything from high winds to heavy snow to extreme heat may cause a power outage. Battery back-up for your computers can help keep your office running. A gas-powered generator can keep the office and a lot of the rest your house usable
  • Have an evacuation plan for any type of emergency and know when to use it

Taking some time now before a disaster strikes can go a long way toward making sure you're able to keep working after the disaster passes.

Recover

Getting back on your feet after a disaster may take some time and effort. Here's what you can do:

  • Contact your customers as soon as possible and let them know about your situation. Most will understand and work with you in making adjustments to due dates, delivery dates, etc. If you're a home-based employee, contact your supervisor. Also, ask if your employer offers any type of assistance to employees who've suffered a disaster
  • Contact your insurance company and make arrangements for an inspection of your home. Have your inventory and pictures of your business property handy. Take pictures of the damage to your home and wok space
  • If your insurance doesn't cover all of your losses and your personal financial condition is tight, contact the US Small Business Administration (SBA) and ask about it's low-interest disaster loan program
  • If your work space is severely damaged or destroyed, consider finding another place to set up shop temporarily. Can you rent a space? Does a parent, family member, or friend have an extra room you can use?
  • If you have to shut down shop and can't work because of a nationally declared disaster, check with your state's unemployment agency to see if you're eligible for Disaster Unemployment Assistance (DUA)
  • Check with the IRS or your tax professional to see if you can take a tax deduction for the loss or damage to your business property or work space
  • Voluntary organizations in your area may be to provide assistance with food, clothing, and other essentials 

Disasters often threaten lives and livelihoods. Knowing what to do before and after one strikes can make it easier for you to stay on your feet and earn a living.

Also, be sure to check with your employer to find out if there are specific actions you need to take to protect their property from harm and how to manage after a natural or man-made disaster.

Questions for Your Attorney

  • Can I take a tax deduction for homeowner's insurance premiums if I work from home for an outside employer? How much can I deduct?
  • Am I legally required to tell my customers that personal information stored on my computers was damaged in a fire in my home-based office?
  • Do I have to use the insurance money I get after a disaster to fix my work space? What if I decide not to work from home anymore?

Tagged as: Insurance, Property Insurance, home based business, property insurance lawyer