Does Your Insurance Cover You for Remote Work?

Employees working at home need the same insurance protections they have at the office.

Shellie Karabell

Once upon a time, employers tended to view working from home as a boondoggle. Who knew what employees were up to if they weren’t working in the office?

Then the Covid-19 pandemic hit, and those skeptical employers became believers: overnight, working from home became the only viable option to staying in business. After all, all it takes is Internet access and workers can complete their daily tasks, answer email, call in and contribute to meetings, stay productive, and collaborate with their team anywhere in the world

The trend is towards homework

To be fair, technology and the Internet had already converted much of the workforce. According to insure.com, remote work in the U.S. increased by 173% between 2005 and 2018.  And the trend appears to be increasing.

A Global Analytics Survey of 3,000 employees between March and April 2020, shows 76% of employees worldwide want to continue working from home. (In France, the Pierre & Vacances holiday rental company offers its properties with the best Internet connections to teleworkers who prefer remote working from vacation destinations.)  Employers such as Google, Amazon, Capital One, Facebook, and Ford Motor Company are embracing remote work as well.

And why not? The benefits are legion: Various surveys report that employees experience less stress (no rush hour commuting, fewer office distractions, more control over their workflow) and higher morale. Companies themselves incur lower overhead and operating costs.

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There is a downside to working remotely

But wait. There’s more. The downside. The nitty-gritty. What happens if the employee’s computer is hacked or if a customer visits a remote worker’s home office and takes a nasty fall? The employer would be responsible for medical expenses, insurance … and legal experts.

Though remote work is quickly becoming permanent, it is still evolving; hence, most insurance policies in effect – both for individuals and for companies – are a bit behind the times. But there are still actions companies and individuals can take to insure themselves against personal and property damage (leaving health insurance aside).

First, what is remote working? The Gartner.com glossary says: Remote work (also known as work from home [WFH] or telecommuting) is a type of flexible working arrangement that allows an employee to work from a remote location outside of corporate office. Remote work arrangements can be temporary or permanent, part-time, or full-time, occasional, or frequent basis.

Employer’s checklist for remote workers

Even though remote workers are not physically present at one central corporate workplace, companies are legally obligated to provide employees with a safe working environment, regardless of where they work. It’s still up to the employer to identify any potential hazards that may come with remote work and to be responsible for implementing measures to control and mitigate risk.

That means ensuring that the home offices follow the company’s work and safety policies –for example, eliminating hazards such as exposed extension cords, and installing smoke detectors and fire extinguishers. Many companies are already drawing up specific regulations, subsidies, and inspection procedures for the home offices of their remote workforce.

At the very least, legally, companies need general liability coverage and most likely workers’ compensation for their employees, even if an employee is working from home: if he or she is hurt at home during business hours, and the injury is related to his or her job duties, that injury is generally compensable.

Each state also has its own workers’ compensation laws – something to consider, as Covid-19 has driven employees out of the employer’s location and required them to set up operations in their homes, thus changing the employee’s “office” location, which may be in another state or even another country. (Check out the U.S. Department of Labor’s State Workers’ Compensation)

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Employee’s checklist for working remotely

Remote workers are responsible for taking care of their own on-the-job health and safety by complying with the policies set forth by the employer.  Full-time employees working remotely normally have the benefit of their employer's insurance coverage, which generally means business items such as laptops, phones and other devices are covered, as well as injuries (under workers compensation). Nevertheless, it’s best to check with the human resources department for precise coverage information.

In general, equipment provided by the employer (computer, headset, screen, phone), will be covered by a company-wide professional or multi-risk insurance policy that will therefore cover damage to this equipment regardless of your employment status. This same insurance also covers employees in matters relating to the protection of sensitive data. Employees who wish to use their own equipment for remote work are usually insured if they have an insurance policy for their home.

Is your insurance policy working remotely?

Independent or contract employees working remotely would do well to take out a business insurance policy to protect people and property – in addition to a homeowner’s or renter’s policy. Best to contact your insurance company to see if you need separate coverage for such work-related claims as business liability, business property, and, potentially, lost revenue.

On the plus side, as working from home means driving less, you should be able to lower your car insurance with pay-per-mile insurance.

The COVID-19 pandemic has changed many things, and your insurance needs are one of them. Make sure an insurance update is part of your “new normal.”

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Shellie Karabell

Shellie Karabell is an international broadcast journalist who has held positions with CNBC, ABC News, PBS, AP Broadcast, Wall Street Journal TV, and Forbes.com.