Around 1 in 4 Americans work remotely. Of that number, 9 in 10 remote workers want to maintain a long-term remote work lifestyle. At this point, remote work is more than just a trend, and with this evolution comes a variety of opportunities and risks for both employees and employers. In this blog, we’ll explore the different types of business insurance for remote workers, how to hedge against common risks, and how to ensure your employees and your business are protected.
What Does Working Remotely Mean?
Before we dive into the different types of small business insurance for remote workers, it’s important to understand the technical differences between working “remotely” and working “from home”.
- Work from home: Many associate a “work from home” policy with a flexible schedule. This entails a company office location where an employee can work part-time, but they can also work from home on other days.
- Telecommuting: This is a hybrid between work from home and remote work, as it refers to most work being done outside of the office in any location with the occasional in-office work.
- *Remote work: Technically speaking, an employee who is “remote” works from home permanently.
*This blog will use “remote work” and “work from home” interchangeably, as it’s common to do so. However, for insurance reasons, it can be important to understand exactly what category your employee’s status falls under.
It’s important to note that with the uptick in working from home (partially due to the COVID-19 pandemic), many positions may remain work from home positions on a permanent basis, meaning employees would technically transition to “remote worker” status. That might be a welcome option for many people. According to a major survey conducted by Global Workplace Analytics, 73% of American employees say they are very successful working from home.
Are Employers Liable for Employees Working from Home?
The short answer is yes. As the modern workforce grows increasingly remote, the major question on many business owners’ minds is whether they are responsible for their employees’ well-being at home as they are in the office. We’ll explore this question in greater detail below.
While it’s more difficult for employers to carry out standard health and safety remote working risk assessments at home, the International Labour Organization advises (but doesn’t enforce) an employer to ensure that:
- Any work asked to be performed can be done safely at home.
- Necessary adjustments are made to tasks to ensure safety while working from home.
- Employees are provided with the right equipment and tools to safely complete their duties.
- Arrangements are made to ensure all equipment is accounted for and returned in proper condition.
- Reasonable accommodations are made for employees with disabilities and arrangements are made for employees’ physical and mental welfare.
It’s important to know that an employer is not technically required to assess an employee’s home space. However, it can be worthwhile to ensure your employees are properly equipped and set up for success in their remote working environment.
Is Homeowners Insurance Enough?
Employees who work from home are likely to have homeowners insurance if they own their homes, or renters insurance if they rent. However, these types of policies are not designed to cover business needs and do not function the same as business insurance for remote workers.
The shift to remote employees has legal implications for a business.
It creates a risk of exposure on several levels. Your existing policy may not cover new concerns inherent in this new situation.
Risks of Remote Working
The risks associated with remote working aren’t just limited to an employee’s wellbeing, though this is important for every employer to consider. However, the type of jobs that typically allow for remote work are often prone to risks less physical, but nonetheless dangerous. Some of the most common risks associated with remote employees include cyber theft, property damage to company-owned equipment, and commercial crimes.
Remote Worker Safety Plan Checklist
Remote worker safety monitoring is an important first step for any business beginning to allow its employees to work from home. If possible, perform a remote working risk assessment at an employee’s home to ensure it complies with the health and safety policies of your business. Below is a helpful checklist to ensure the safety of your remote worker’s home setup:
- Inspect the office space. Schedule a work-from-home inspection to ensure that the employee is continually complying with your business’s requirements.
- Designate a dedicated work area. It may be beneficial to assign a specific location or area in a house or apartment for remote working to help minimize the likelihood of injury claims.
- Focus on cybersecurity. You may need to have an IT professional set up a secure connection between the employee’s home and your company network. In addition, you may want to ensure all employee devices (including laptops, tablets, and desktops) are protected from cyber threats.
Business Insurance for Remote Workers
The life of a business owner is occupied with keeping employees healthy, productive, and employed. But what’s the best way to do so?
Below we’ll explore the different types of business insurance for remote workers, as well as their unique benefits for protecting against losses from worker injuries, data breaches, business property damage, and more.
Cyber Liability Insurance
The risk of a remote work cyber attack or security breach increases significantly with employees working remotely. Security measures should be put in place to help prevent a data breach, including an encrypted virtual private network (VPN) that allows employees to access company resources and applications. Even focusing on simple things like strong passwords for company or client accounts can help prevent data breaches.
If your company were to suffer a data breach, first-party cyber liability insurance covers the damages. This may include the costs of notifying affected clients and providing them with ongoing security measures like fraud and credit monitoring. If one of your clients files a lawsuit after experiencing a data breach, third-party cyber liability insurance can cover legal expenses.
If you are in the IT business, both first-party and third-party cyber liability insurance may be bundled with your technical errors and omissions (E&O) insurance.
Workers’ Compensation Insurance
Do you have to provide workers’ compensation for remote employees? Yes, but the good news is that a standard worker’s compensation plan typically covers remote employees. Most states require businesses with employees to carry workers’ compensation. If a claim is filed, the injured employee must prove that the injury or work-related illness occurred while performing work duties during business hours.
General Liability Insurance
General liability can also function as business liability insurance for remote workers. Covering everything from advertising injury to libel and slander, this coverage helps protect your organization from liability to a third party caused by your company or employees.
Commercial Property Insurance
This type of business insurance for remote workers is designed to protect the equipment, inventory, and assets of a business. Remote workers often use equipment belonging to their employer but use it offsite. If this is the case for your business, it’s important to ensure your commercial property insurance policy also covers company-owned equipment used by your employees in their homes.
What Happens if a Remote Employee Damages Equipment?
The chances are high that your employees have homeowners insurance. However, as soon as someone uses personal property insurance for “business use,” there are limits to how much a home insurance policy will pay to replace that property. Most home insurance policies offer some protection for business policy, but on average the insurance may cover up to $2,500 for “business personal property.”
If your remote employee is using “borrowed” company equipment at home, a homeowners insurance policy is not likely to cover this equipment. This means that without the proper work-from-home insurance coverage, damaged or broken equipment will be an out-of-pocket expense for either you or your employee.