This rise in remote work brings with it many changes to the insurance landscape. It’s therefore necessary that insurance companies adapt to increased remote work, and that companies adjust their policies in line with new working models.
As employees are increasingly working from home or as digital nomads, there are a range of new insurance risks that companies need to identify. Once identified, these risks need to be insured to protect corporations and their employees.
It’s imperative that companies assess and consolidate their new risks of having remote workforces, and get advice on how to adjust their insurance so they’re adequately covered.
Below we look at why insurers are embracing the shift towards increasing levels of remote work, and we look at some of the new risks that this poses. We also look at how companies can protect themselves against these new risks by taking out appropriate insurance cover.
How does remote work differ from office-based work when it comes to insurance?
From an insurance cover perspective there are many differences between working in an office at a company premises, to working from home or remotely that should be considered. These changes can create new risks for companies, which need to be identified to be specifically covered by a new policy.
Here are some of the ways in which remote work is different:
- IT equipment: Employees may use their own devices for work (if there’s a BYOD policy), or they may be given a company device which they use at home.
- Workspaces: Employees working remotely may work from home, from a coworking space, or from a coffee shop.
- Workplace injuries: Employees working remotely may be susceptible to workplace injuries. In some jurisdictions there is an onus on the employer to ensure a safe working space, which comes with liability for injuries.
- Increased online communication: As more employees transition to working remotely, it means they will be increasingly communicating online. All these digital interactions make companies more susceptible to data breaches and cyberattacks, as well as opening up companies to possible libel or defamation lawsuits.
- Use of company property: When employees work remotely, they need various devices like laptops to carry out their duties. If companies provide staff with devices, then there may be different risks in terms of damage and theft. This will vary depending on where employees live.
- Empty company premises: Companies that allow many of their staff to work remotely, may still have large premises that may now be standing empty. That may make them more susceptible to theft in some cases.
- Different legal jurisdictions: As companies start to hire remotely, chances are you’ll employ people living overseas. These foreign jurisdictions may have different labour, healthcare and work compensation laws and it’s important to realise your risks of non-compliance.
What are the new insurance risks as a result of remote work?
Given the many differences between remote work and office-based jobs, there are many changes to companies’ insurance risks when their staff transition to working remotely.
Below we explore some of these potential liabilities posed by the transition to remote work:
Damage to company assets and infrastructure
When employees start working from home or remotely, they may use a range of company assets like laptops, monitors, printers, mobile phones, routers etc.
When staff are all working from one central office-based location it’s easy to insure all of this equipment. But when staff work remotely, you need to keep a thorough asset register and to get the right insurance for all these devices.
There are risks that this company property could be damaged or stolen, so it’s important to protect against these eventualities with business property insurance. There may be limits to cover depending on where your employees live and work from.
And if companies maintain their office space, even when most or all of their staff are working remotely, then this may change their business insurance premiums. Some offices may be more at risk of theft and burglary if no one is onsite each day.
Company car insurance
Depending on the nature of the business, you may have a fleet of company cars for employees to use as part of their jobs.
If, when your staff members become remote workers, you sell these company cars and staff are still expected to travel for work – they may then use their own cars. If an employee is travelling in their car for work and has an accident, the company may be liable.
It’s important to therefore check that if staff are using their personal vehicles for work, that they are well maintained and safe to drive, and that they have the right insurance cover.
And you may want to reconsider your business policy about ridesharing and the type of transport that staff may use for work to ensure maximum safety and reduce risks.
Business data security and cyber risks
It’s critical nowadays for businesses of any size to have comprehensive insurance to cover them in case of a data breach, privacy breach, loss of data, IT related interruptions or cyber threats.
And with a growing remote workforce, the risk of cyber related incidents increases. That’s all the more reason you need to have a robust IT and cybersecurity policy in place to guard against all of these risks.
But you may not be able to get fully comprehensive cover for these types of risks when employees work from home (compared with office-based roles), which is something to consider.
When employees are all based in an office, you can take measures to reduce the risks of workplace accidents and injuries. But when staff work from home or remotely, all of that changes. And it can be challenging to assess and implement workspace safety measures.
Employers can conduct regular remote workplace safety assessments and checks, and provide support for employees to minimise their risks or injury and accidents. This includes having an ergonomically designed workstation. That can help to reduce the risks of repetitive strain injuries, as well as musculoskeletal strain and injury.
It’s imperative that training be provided regularly to staff about the importance of good ergonomics and how to reduce their risks of injury. That includes taking regular breaks, avoiding eye strain, and shifting position.
It’s also important to think of other possible home related risks like fire, flooding, electrocution etc. There are many ways in which these risks can be minimised too. For example, by creating a fire safety plan, by installing fire detectors and having access to fire extinguishers, and by ensuring electrical compliance.
And if staff do get injured, it’s important that they have access to healthcare. That may mean that you need to re-assess and adjust your healthcare insurance to make sure it’s suited to remote workers. And if you have many digital nomads on your payroll, that involves setting up healthcare plans in foreign countries.
To make it easier for companies hiring remote staff and digital nomads to get the cover they need for all employees, no matter where they are based, companies like SafetyWing have created tailor-made solutions. Their global health insurance for remote companies lets employers add new staff to the company insurance policy, whether they are full-time or freelance staff.
Risk of non-compliance with international labour, benefits, and healthcare laws
Companies that hire remotely, may hire people who are living in different countries. That brings with it the challenge of needing to comply with those countries’ labour laws (including minimum wage requirements), healthcare laws, and laws regarding working hours and benefits.
To minimise your risks, it’s important to consult a qualified legal practitioner and insurance company to help you navigate the risks and find solutions.
How should companies adjust their insurance to stay protected with increasingly remote work forces?
Given that there are many new workplace risks for companies when staff work remotely, it’s important that corporates take action to identify and minimise these risks.
To get started with identifying risks, you could compile a remote work safety checklist.
Here are some insurance risk related suggestions to help keep your company (and staff) safe and protected:
Create a remote work policy
Most companies with remote staff are seeing the importance of having a comprehensive remote working policy. This policy should provide information and guidelines about how to create an ergonomic home office, whether employees will use their own devices or the companies – and how those devices and their data need to be stored, used and protected.
Companies can outline what software employees should and are permitted to use, whether a VPN is required, and how to protect against cyber security threats.
This policy should also explain whether company cars will be used for work-related events, or whether staff will be expected to use their own cars. Companies can prescribe minimum requirements for driving any vehicle and can explain how insurance cover works, so that expectations are clear.
Outline all employee benefits
It’s also good for companies to outline all benefits that staff will receive. This includes any healthcare insurance benefits, pension contributions, sick leave and other holidays. Companies will need to assess how these benefits should be tailored, according to where staff are located – so as to comply with international and foreign laws.
Conduct regular staff training
It’s imperative that companies conduct regular staff training to reduce their risks and liability when it comes to operating a business.
This includes cybersecurity awareness training, which some experts suggest should be conducted and repeated every 4 months. You may also want to train staff on workstation ergonomics and how to maintain a safe working environment.
And you may want to provide regular mental health workshops to other practices to help identify and reduce the risk of burnout, work stress, and mental health disorders.
Conduct regular virtual risk assessments
Companies can also conduct regular virtual assessments to ensure compliance with the remote work policy. This can help to maintain a handle on risks and how they are being managed.
For example, you could conduct regular workplace safety assessments or surveys to see whether staff are managing to comply with ergonomic and workplace safety protocols. And you could check that employees maintain electrical compliance, that they check their geysers regularly (to avoid leaks and floods), that they comply with fire safety protocols, and that they have adequate security installed to protect against theft.
Adjust healthcare insurance for remote workers and digital nomads
Employers may want to offer healthcare insurance for their staff – and in some countries they may be required to do so. It’s important to get healthcare insurance suited to remote workers and to have digital nomad insurance for staff who work and travel overseas.
Adjust commercial property insurance
If offices are left standing empty while staff work remotely, you may want to consider adjusting your commercial property insurance accordingly.
Adjust cyber insurance
With staff dispersed and working from home, there’s a higher risk of cyber attacks, fraud and data breaches. It’s important that IT infrastructure, communication and networks be secured to minimise risks. And that companies adjust their level of cover accordingly. In some jurisdictions, you may need additional commercial crime insurance to cover some risks not covered by a cyber policy – for example where an email phishing scam precipitates a fraudulent money transfer.
Adjust general and employer liability insurance
In some countries, liability for an injury to a worker will revolve around whether they are classed as an employee or contractor, where the injury happened and what type of activity the staff member was involved in during the time of the injury.
It’s therefore important that employers re-assess their insurance policies to ensure that staff are covered wherever they may be working from (even if in a foreign jurisdiction).
Final thoughts on guarding against insurance risks related to hiring remotely
For any company that hires remote staff, it’s important to keep abreast of the implications and risks that this new working model brings.
Once you’ve completed a risk assessment, you may then want to reassess your insurance cover to check that you have the level of liability protection that you want and need.
Hopefully, this article has provided some food for thought and some ideas about the types of insurance cover that you may need, particularly if you’re new to hiring remotely.