Am I Liable? What changes when employees work from home?

For many businesses, navigating the work from home dynamic is uncharted territory. For others, it is simply a magnification of what already was, however on a much deeper level. Regardless of which end of the “remote work” continuum your business falls, we can all agree that the landscape of business has shifted. As with any business change, new challenges arise. Business leaders must be aware of changing risk and regulations.

Presently, my entire team is working remotely. Some employees have a full home office while others find themselves working from the dining room table, as they were accustomed to coming into the office daily. I started asking questions about what my risk is, as a business owner, with regard to employees working remotely.

I sat down (in a virtual room, of course) with insurance expert Lisa Bracero of Bender Insurance Solutions to get some answers.

Katie: 

As a business owner, should I be worried about additional risk with my employees working from home? Is it safer, or less safe?  

Lisa:

As a business owner, there are several evolving risks to manage in the COVID-19 pandemic. What I love about your question is that you’re identifying that your employee safety risk is changing, and you are contemplating the dynamics.

Identify & analyze are the first steps in the risk management process.

The exposure of employees working from home, or other incidental locations, has been part of many companies’ risk profiles – it’s just been a smaller part. Employees may have been logging in from home, attending conferences, traveling for business, etc. COVID-19 has significantly increased telecommuting and heightened our awareness of the existing risks.

Katie:

My mind is racing. What if someone trips over a power cord in their home office and breaks their arm? Am I liable?

Lisa:

Yes, an employee tripping over a power cord in their own home could generate a Workers’ Compensation loss under your policy. An employee tripping over their own pet may even result in a covered loss.

Workers’ Compensation rules and benefits vary by state, and claim adjusting is always going to be fact specific. If there is a claim, the insurance carrier will gather information and evaluate whether the injury arose out of the course of, and in the scope of, employment.

Workers’ Compensation benefits are intended to provide a remedy to injured workers without requiring lawsuits or “liability” findings. What this means for employers is that it’s even more important to set clear expectations in your policy guide on working from home conditions.

If employers need a resource on Work from Home ergonomic strategies, they can contact either you or me as we have resources that can help.

Katie:

My employees are storing equipment at home that is normally kept in the office. Should I be asking if employees have homeowners or renters insurance and asking for proof of insurance?

Lisa:

It is absolutely a good practice for employees to have personal homeowners or renters’ coverage. In addition, your employees should confirm that their personal insurance protects their liability and property while they’re working at home for you.

However, their personal insurance policies may not provide the coverage needed for your equipment. Their policies may exclude or limit coverage for property of others or for business personal property. As you consider the coverage you want, talk with your insurance broker to see what your current policy provides, if anything, for offsite property, electronics, etc. to determine whether you may already be covered properly or if you need to make a change to your insurance.

Katie:

Are there other factors I should be taking into consideration, or new information I need to be asking for?

Lisa:

Risk management is a huge area of consideration. If I had to pick one additional topic, a hot item right now is cyber security. Even before COVID-19, cyber risk was a prominent threat facing businesses. Now, it’s even bigger.

Here’s why: telecommuting introduces greater risk when remote connections are less secure. Couple this with some employees using personally owned devices with less protection, and you immediately have greater system vulnerabilities. At the same time, the social engineering element, which preys on people’s curiosity, distraction, etc., creates fertile ground for phishing and ransomware emails to infect your systems.

You’ll want to work with your IT company to analyze your systems and build protections to mitigate risks to your network and data. Now is also a good time to review your Cyber insurance coverage. Does it provide coverage regardless of location? Are temporary, seasonal, volunteer and interns all considered “employees” in the policy? What about personally owned devices? If your employees are accessing company networks or data using their own laptops, cell phones, etc., it’s crucial that these are included in your insuring agreement.

As always, if a business has questions on their coverage, or believes they have a claim (COVID-19 or otherwise), they should discuss with their broker and submit the claim. 

Katie: 

Can you point me to any other valuable resources?

Lisa:

The Hartford published an article titled “Liabilities of Letting Employees Work from Home.” The article discusses important considerations including ergonomics, trip & fall hazards, and fire safety risks. One of their recommendations is to have employees complete a working-from-home safety survey. Link to the article is available online at https://www.thehartford.com/small-business-insurance/liabilities-employees-work-from-home .

The Bottom Line:

Risk management is important, and often overlooked. The old adage “better safe than sorry” is timely and relevant, as there is so much to consider.