During the pandemic, many organizations adopted remote and hybrid work models or expanded their use of them. However, this shift is much more than a temporary trend. Today, as much as 80% of the workforce worldwide is now considered “deskless,” which means they work for their organizations off-site, telecommuting with managers and colleagues. With so many workers off-site, how can businesses manage their increased risk exposure to both real-world and cybersecurity threats?
This article explains how telecommuting has impacted risk exposure for businesses in Hawaiʻi, including the need for applied risk services. Updated insurance policies can help businesses adapt to telecommuting and protect their workers and resources from the new challenges it presents.
What is Telecommuting?
Advances in on-site company networks and conference apps allowed organizations to offer hybrid and remote work models to employees, even before the pandemic. These workers communicated with managers and team members through company applications while working from outside the office. While this introduced new risks to the businesses that provided these work models, telecommuting was not as prevalent as it is today.
With so much of the workforce now deskless, the risk exposures of telecommuting have become a primary risk management issue for businesses of all sizes. Traditional insurance policies are no longer enough to cover new risks and liabilities, since they were designed to cover the risks of a centralized, on-site work model.
To identify the new insurance needs of a business as a result of telecommuting, owners should first look at how each area of insurance protection has changed.
1. General Liability Coverage
General liability insurance protects businesses from damages related to accidents involving company-owned equipment and property. For telecommuting workers, the line between company and home has become blurred, warranting an insurance update.
For example, remote workers often rent company equipment for their homes, which can cause worker injury or lead to the equipment becoming damaged. The worker’s home insurance may not cover an accident related to work activities, so how can businesses clarify the distinction to protect their workers and assets?
General liability coverage can be updated with coverage for off-site incidents to respond to the risk factors of telecommuting. The definition of a covered accident should be refined to protect employees no matter where they work.
2. Cybersecurity Coverage
Cybersecurity risks change when businesses adopt a telecommuting workforce. Rather than having security measures centralized for on-site employee protection and data transmissions, the employees and the technology are more dispersed, which makes each process more vulnerable.
Employees are more susceptible to phishing and ransomware scams due to their reliance on online communication. Unauthorized company access becomes more difficult to control since more workers have passwords to an increasing number of cloud-based systems.
This larger risk exposure must be reviewed and addressed to prevent costly security leaks. Stronger password controls, automatically updated firmware, and increased employee cybersecurity training can help. Additionally, insurance that provides protection specifically designed for cybersecurity liability is a necessary safety net for companies with growing off-site networks.
3. Workers’ Compensation Coverage
With so many workers telecommuting, workers’ compensation coverage can now activate even for accidents sustained in the home. Slip and fall accidents, wear and tear injuries due to straining, and other injuries can be considered “work-related” despite occurring off-site.
This suggests a greater need for policies that define injuries in remote work scenarios. The goal is to protect employee wages and expenses in the event of legitimate harm without needlessly exposing the business to extra claims.
4. Property Coverage
Telecommuting workers often bring company property into their homes or workspaces to accomplish their jobs, including company-owned laptops, monitors, and other equipment. This means that the property insurance of the business must adapt to protect these assets outside of the office, coverage which many conventional business insurance policies lack by default.
Businesses that rent company property to telecommuting workers should consider adding endorsements to their policies to protect these assets even when they’re not on-site.
5. Business Interruption Coverage
Business interruption coverage protects businesses from lost income and relocation expenses when covered accidents cause temporary closures. In Hawaiʻi, this is especially important since so many events, from weather-related disasters to tourist-related accidents, can cause temporary closures.
How does this impact telecommuting workforces? Traditional business interruption coverage may not cover lost income due to issues with remote workforces, so policies must be updated to reflect the specific challenges of telecommuting. For example, region-wide blackouts and internet outages can lead to operational downtime due to the dependence on technology of telecommuters.
Lost income in this example would not be covered by traditional business interruption coverage, making updated business interruption coverage necessary to predict the new risks of telecommuting.
6. Professional Liability Coverage
Professional liability policies protect businesses from the costs of errors, omissions, or negligence by their employees. In Hawaiʻi, customer service-focused businesses in tourism, travel, and hospitality industries are particularly vulnerable to professional liability.
However, any business can be impacted, and the risks of errors and omissions increase with telecommuting as remote workers adopt new communication and security workflows. Work environments can also be more informal and distracting for remote workers, leading to accidental negligence.
Though the errors of remote employees can trigger professional liability claims, many professional liability policies restrict coverage to on-site incidents. These policies should be changed to acknowledge the new needs and limitations of telecommuting workforces.
Protect Your Business with Local Applied Risk Services
Telecommute work environments are now a necessity in modern industries, but traditional insurance policies often leave coverage gaps that fail to adapt to the liability challenges of remote work. At Atlas Insurance, our team of local insurance experts builds on nearly a century of experience to update and customize applied risk services for modern workforces in Hawaiʻi.
Contact our team today and schedule a consultation to make sure the telecommuting workforce of your business is covered correctly by your policies.