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Insurance Considerations for Employers With Remote/Hybrid Employees

Many businesses have found that having employees who work from home, which was a necessity during the pandemic, has become a benefit since employees tend to prefer remote or hybrid work and productivity has not suffered. However, the rise of remote work comes with potential liability, requiring employers to examine the scope of their existing insurance coverage and to explore additional options for coverage.

Remote working generally implicates three forms of business and employer-liability insurance: (1) worker’s compensation; (2) cyber-insurance; and (3) commercial property insurance.
 

Workers Compensation

Almost all states require businesses with employees to maintain workers compensation insurance covering, among other things, lost wages and medical bills for employees who are injured or become ill on the job. Generally, this insurance covers employees regardless of their location, so long as they are “in the course and scope of employment” when they become injured and/or their illness is job-related. However, if a remote/hybrid employee is injured at home and files a claim, it is that employee’s burden to prove that the incident occurred during business hours while performing work duties.
 

Cyber Insurance

The risk of a cyberattack increases dramatically with virtual employees. In fact, 74% of organizations attribute recent cyberattacks to vulnerabilities created by remote working.[1] An adequate cyber liability insurance package includes both first-party coverage (for damages resulting from a breach on your own systems) and third-party coverage (for damages resulting from a breach compromising your clients’ systems and information).
 

Commercial Property Insurance

If your company has remote workers, they are likely using laptops or other equipment which belong to the business but are being used offsite. Commercial property insurance reimburses the company for business property that is lost, damage or stolen.

Standard commercial property insurance generally covers property on the premises of the business but may exclude or reduce coverage for property away from the office. It is critical for businesses with hybrid/remote employees to secure commercial property insurance that covers business property used offsite by remote/hybrid workers.
   
In sum, the business world has discovered the benefits of employees working remotely. Employers are well-advised to make sure they maintain the appropriate insurance to address this new environment.

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The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.