The shift to remote work has accelerated rapidly, especially since the COVID-19 pandemic, and now, nearly 50% of companies have employees working remotely. As businesses continue adapting to this model, ensuring proper business insurance coverage for remote workers has become essential. Standard commercial insurance may not cover the unique risks associated with employees working from home, so it’s important to address this gap to protect your business. Let’s explore the key types of insurance your company needs to consider for a remote workforce.
1. General Liability Insurance
Regardless of where your employees work, your business needs general liability insurance. This policy protects your company from unexpected events that could result in injury or property damage. For example, if a customer is injured while picking up a product from a remote employee’s home, your company could be held liable. General liability coverage typically extends to wherever your business operations take place, but it’s crucial to verify that it covers remote working situations. Some policies may have a “Designated Premises” endorsement, which limits coverage to specific locations. If remote work isn’t explicitly covered, now is the time to discuss it with your insurance broker.
2. Property Insurance
Property insurance for remote workers mainly concerns the business equipment they use, such as laptops, phones, and other devices. Different insurers categorize equipment in various ways, so it’s essential to have a clear conversation with your broker to understand how your property is classified and covered. If equipment is used off-site, coverage might be limited. For example, a stolen laptop might not be fully covered unless it’s classified properly. If your business has multiple remote employees, you may need to increase the coverage limit to reflect the actual value of the equipment deployed in the field. Be mindful of coverage restrictions, as these limits could impact your claim if a larger-scale incident, like a natural disaster affecting multiple employees, occurs.
3. Hired & Non-Owned Auto Liability
What happens if an employee uses their personal car for business purposes and causes an accident? Hired & non-owned auto liability insurance is necessary to cover these situations. Although an employee’s personal vehicle insurance should cover accidents when using their car for personal tasks, this coverage extends to situations where they use their personal or rented vehicle for business. If remote employees occasionally drive for business, such as picking up supplies or attending meetings, this coverage protects your company from potential liabilities.
4. Workers’ Compensation Insurance
Workers’ compensation insurance is vital for all employees, whether they are working from an office or remotely. This insurance covers medical costs and provides compensation for employees injured while working. While it’s easier to manage safety in a physical office environment, remote work poses unique challenges. Workers’ compensation will generally cover injuries that occur during regular business hours, even if the employee is working from home. However, if your employees are located in multiple states, you may need to adjust your policy to comply with the regulations in those areas. Additionally, implementing remote work safety protocols can help minimize the risk of claims.
5. Cyber Insurance
As remote work increases, so does the risk of cyberattacks. Cybercrime has surged dramatically since the start of the pandemic, and companies must protect themselves against breaches, data theft, and other cyber threats. Cyber insurance provides coverage in the event of a data breach, hacking, or ransomware attack. However, since there is no standard form for cyber insurance, it’s critical to review your policy carefully with your broker to ensure comprehensive protection. Your insurance provider will also want to know that your company has cybersecurity protocols in place to minimize the risk of breaches.
Personal Devices and Cybersecurity
If employees use personal devices for work-related tasks, you must make sure these devices are included in your cyber insurance policy. Many cyber policies exclude personal devices unless specified, meaning that if an employee’s personal phone or laptop is involved in a cyberattack, the company might not be covered. Additionally, many insurers now require devices to be encrypted to qualify for coverage, so it’s crucial to implement this protection across all devices used by remote employees.
Privacy Concerns
Remote work also raises privacy concerns, especially when employees handle sensitive data outside of the office. Without proper safeguards, personal devices and home environments could inadvertently violate privacy laws. For example, employees may unintentionally expose confidential information via unsecured email or improperly dispose of documents. To mitigate these risks, establish clear privacy policies and ensure employees are trained on how to handle sensitive data securely.
Directors and Officers Liability
Remote work can increase the likelihood of claims related to management decisions, especially concerning company operations, security, and remote work policies. Directors and officers (D&O) liability insurance protects your leadership team from claims resulting from business decisions. It’s essential to ensure that your D&O coverage is comprehensive and includes provisions that address the specific risks of managing a remote workforce.
Additional Considerations: Other Insurance
Most business insurance policies contain “Other Insurance” clauses, which determine which policy takes precedence when multiple insurers are involved in a claim. For example, if a laptop is stolen, it may involve property, cyber, and criminal coverage. Work with your broker to ensure that your policies are coordinated to avoid issues when filing claims.
Communicating with Your Insurance Broker
As remote work continues to evolve, it’s more important than ever to stay in touch with your insurance broker. Schedule an annual review of your policies and discuss the unique needs of your remote workforce. Make sure your broker understands the specific risks associated with remote work, and request written confirmation of how your policies cover these scenarios. The last thing you want is to find out that a claim, which would have been covered in the office, is not covered for remote employees.
Ensuring your business insurance is updated to reflect remote work trends is crucial for protecting your company. With the right coverage, you can confidently manage the risks of a remote workforce while safeguarding your business against unexpected challenges.
