Remote work has revolutionized how employees work in the American workplace. What began as a necessity due to a pandemic has been a permanent change in the way businesses function. Teams are spread across, offices are virtual and flexibility is the norm. While companies have been able to adapt their processes, one aspect which hasn’t always been up to date is the coverage for insurance.
With more workers working at home, many companies think that their current insurance for business automatically covers remote employees. But, it’s not always the case. These assumptions can result in expensive surprises.
At Keen Coverage, we’ve assisted a variety of U.S. businesses navigate the ever-changing risk landscape that is remote and hybrid work. In this post, we’ll discuss the hidden risks associated with remote work, the gaps in coverage to be looking for and what you can do to ensure your remote workers are adequately secured.
1. The New Workplace, the Same Old Risks
Even when your employees work from home offices, the risks that are essential to business remain. They’ve just changed. Equipment is still susceptible to damage and confidential information can get stolen and employees may still be injured during their work.
Here are some real-world examples:
- Remote employees trip across a cable while making calls from clients, is it possible to make a workers’ compensation claim?
- A laptop belonging to a company was stolen from a café. Is the breach of data protected?
- The Wi-Fi of an employee’s home is breached, exposing private client information. Who’s responsible?
These situations highlight a basic truth: the place of work has changed but the obligation of employers hasn’t. Employers must make sure that the policies they use for insurance reflect the current working structure.
2. Why Standard Business Policies Often Fall Short
The majority of traditional commercial policies for insurance were created specifically for office-based operations. They presume that business equipment as well as employees and activities are confined to a single location. When business operations expand into the home environment there are coverage gaps that can be seen particularly in the following areas:
A. Property Coverage
The commercial property insurance policy could protect company-owned monitors and laptops however, it may not cover equipment after it leaves the office. If a company laptop issued to an employee was stolen away from the residence, the insurer could refuse to pay the claim if the policy doesn’t provide for offsite coverage.
B. Workers’ Compensation
In many states, remote workers are in the process of obtaining workers’ compensation benefits, but the process of proving that an injury “arose from work” can be a bit difficult. Was the incident really work-related or a result of a domestic or other activity? Documentation and clear remote work safety guidelines are vital to prevent disputes.
C. Liability Protection
If a remote worker is apprehensive about sharing confidential information or mishandles client data, the consequences could not be covered in full under the standard guidelines. Particularly in the case of an incident that occurs on private networks at home that are not secure.
D. Cybersecurity Risks
When employees connect to company servers through personal devices, or via home Wi-Fi, cybersecurity threats grow exponentially. A single email containing a phishing scam could cause your company to be the victim of lawsuits, fines and penalties from regulators and even data recovery costs. However, many small-scale businesses do not have dedicated cybersecurity insurance.
3. Key Coverages Every Remote Business Should Review
To ensure that your workforce that is remote and hybrid adequately protected, it’s time to re-evaluate and improve your insurance policy. Here are the top insurance policies all businesses should be considering:
A. Business Property Offsite Coverage
Expand your insurance for business property to include worldwide or offsite protection for mobile devices, laptops and other portable devices. This means that company assets are insured wherever your employees are.
B. Workers’ Compensation for Remote employees
Check with your insurance company, the workers’ compensation policy covers remote workers and that your injury reporting procedures are clearly defined. It is also important to document the guidelines for safety in your home office as well as ergonomic standards to minimize the possibility of claims.
C. Cyber Liability Insurance
Remote work means the risk of being more vulnerable to ransomware and data breaches. Cyber liability policies will cover the costs of responding to an incident, legal costs, regulatory penalties as well as reputational damage that a cyberattack can cause.
D. Professional Liability (Errors and Omissions)
If remote employees offer services such as design, consultation or technical services, in this case, a professional liability insurance will protect you from allegations of negligence or omissions committed while working offsite.
E. Employment Practices Liability (EPLI)
Remote workers can create a challenge for HR communication and oversight, and could increase the chance of discrimination or wrongful termination lawsuits. EPLI protection helps to shield employers from employment-related lawsuits.
4. Practical Steps to Strengthen Your Remote Risk Strategy
The insurance alone won’t suffice and must be combined by proactive risk control. Here’s how you can build a solid defense
- Make sure you update your handbook for employees with the latest information on the work-from-home requirements, safety guidelines and IT-related protocols.
- Secure technology including company managed laptops, VPNs, and the tools to manage passwords.
- Track assets of the company to find out what equipment is located offsite and where it is.
- Make sure employees are aware of cybersecurity which includes phishing prevention as well as secure file sharing.
- Examine your insurance policy every year, particularly if your organization’s size or structure changes.
5. The Cost of Ignoring Coverage Gaps
Failure to adjust your insurance plan to remote environments can be costly. Imagine a scenario in which the personal computer of a remote employee has been compromised, resulting in an important data breach of the client. If your policy doesn’t cover personal device incidents, your company is accountable for thousands of legal costs and settlements.
These are the types of risks that companies do not recognize until after the damage has been completed. The positive side? With the right combination of tailored insurance and proactive plan, you can secure your business from the unexpected.
The experts in Keen Coverage are excellent at blending the best practices of a company with an extensive policy review that helps companies find gaps in coverage before they develop into claims.
Conclusion
Remote work is expected to continue and is the risk associated with it. As workplaces change and the insurance program must change as well. Insuring your remote employees isn’t only about compliance, it’s about ensuring continuity of business as well as trust and long-term stability.
At Keen Coverage, we assist U.S. businesses of all sizes improve their insurance strategies to accommodate the ever-changing workforce of today. From cyber security to offsite property. We ensure that your workforce regardless of where they work is secure, connected, and confident.