For those working from home (including in condominiums and apartments) it is likely a work area has been established that includes a desk, chair, book cases, computers, monitors, printers, printer paper, phones, calculators, etc. and maybe even a kitchen table. It is also very likely that many of these items are used both for personal and business purposes. For example, one may use their computer and printer for household bills, entertainment, and schoolwork as well as for business purposes.

Following a fire or other casualty the insurance company will ask if certain items were for business or personal use. Many insureds, not realizing it will impact their recovery, may indicate items are for business use, even if used for business and personal tasks. The value of these items often far exceeds the coverage limitation leaving the property owner underinsured for these items and thus not able to fully recover for their loss. What is worse, without money to replace this property they may not be able to return to work thus compounding their financial losses.

To further complicate matters, there is no bright line test to determine when a piece of property is used "primarily for business purposes." By definition, primarily means "for the most part" or mainly." Quantifying that amount is problematic as there is no further guidance in the policy. Certainly, most people would agree that something used 90 percent for business would be considered "primarily for business." But what about something used 51 percent of the time for business? That item is used more for business than personal but is that really its "primary" use? In addition to the percentage of time an item is used for business versus personal, other factors may also be considered.

Back to the kitchen table. Under the standard HO 3 policy, it is unlikely that a carrier would consider the kitchen table business property, though it could easily be argued. Consider this, if a person spends forty hours p/week working at their kitchen table but only twenty-one hours eating at the table (one hour p/meal, three meals p/day seven days p/week) it could be argued that since twice as much time is spent at the table for work as for personal use that its used "primarily for business." But does that change the kitchen table use from primarily personal to primarily business?

Most people would likely agree that the kitchen table was purchased and intended for personal use and is still primarily used for personal use, particularly if considered over the course of its useful life rather than its limited increased business use that may only last until a desk can be purchased or the person goes back to work at the office. That said, there is some merit to the argument that it is used "primarily for business purposes" and it is likely some carriers have or will make the argument.

The same facts under language such as that found in the in the other policy referenced above would result in a very strong argument for the carrier to assert the kitchen table is limited as business property since the requirement is only that it be used "in any way at any time for business purposes." With such broad language it would be very easy to assert the kitchen table is included in the limitation for business property.

While it is unlikely that most carriers will take the position that a kitchen table is business property, it demonstrates significant issues that people working from home must consider to make sure they are properly insured. The items in a basic "home office" may easily have a replacement value far in excess of the $2,500.00 covered under the HO 3 policy.

Critically important to this topic is what was the property purchased for originally? Many people have a "home office" where they have a desk and store their personal records such as taxes, car titles, medical records, vet records, insurance policies and other such paperwork. The insured putting his work laptop on that desk doesn't make that desk primarily used for business, even though the insured may be working remotely at that desk for forty hours a week. The desk still contains the personal records, as well as stamps, address books, and pictures of the family and pets.

Property the insured already had at home and is using temporarily while working from home during a pandemic is different from property an insured purchased to use in his business, or property that his employer provided and allowed him to bring home to use in order to perform his job.

It is important that everyone working from home make sure they are properly insured. Otherwise, after a loss, they may not have the money to replace necessary equipment to continue working, thus compounding their losses.

Everyone working from home, full time or part of the time, can properly protect themselves by considering the following questions and discussing them with their insurance agent or broker.

• What property do I have at home that may be considered "business property" as defined in my policy? • What property do I have at home that may be considered as being used primarily for business purposes? • How much would it cost to replace all of the property that may be treated as being used primarily for business purposes? (or for any business purpose depending on the policy language). • What is the limit for business property in my policy? • Can I increase the limit if I do not have enough insurance?

These questions and the answers should be reviewed in detail with your insurance agent or broker. Conversely, it is advisable that agents and brokers reach out to their residential clients to advise them of the potential risks and offer up solutions for increased coverage endorsements, if needed.

When valuing property, it is best to err on the side of caution when determining if an item may be considered by your carrier to be limited as business property. Any item that may possibly fall into this category should be reviewed carefully so the property can be identified correctly as business or personal property. And, of course, your replacement cost value should be based on the cost to replace the items today, not the amounts paid when originally purchased. When working from home it is imperative that insureds properly identify, value, and insure all property that may be considered business property under their policy. By properly insuring this property, in the event of loss, the insured will be able to avoid the catastrophic outcome of losing their critical business property and not having enough money to replace it or worse, leaving them unable to earn an income. And of course, by properly insuring, they will also be able to replace their kitchen table.