Insuring Your Remote Workforce for Business Continuity

The rise in remote work has resulted in new challenges that require adaptations. From inadequate data security to the potential for injuries while working from home, the risks of a remote workforce should be mitigated. Other than embracing remote work and establishing a strong remote work culture, companies should obtain suitable insurance.

Remote work insurance can significantly minimize the financial impact of remote work incidents, saving companies thousands to millions of dollars. Let’s discuss the best remote workforce insurance policies for a business with a remote workforce.

Understanding Remote Work Insurance Needs

1 in 4 Americans work from home. Knowing the risks associated with remote work is essential for a company’s success and security. Many remote risks exist in the office too, but are exacerbated by the fact that businesses cannot monitor employees working out of the office.

Traditional commercial insurance often has gaps in coverage, failing to meet the needs of a business with a remote workforce. Here is what a set of remote work insurance policies should cover.

Data security: Remote workers may not be familiar with data security procedures that are automatically implemented while in the office. For example, a remote worker may feel confident in clicking links and opening files they receive while on a company laptop. Doing the same while working from home can greatly increase the risks of malware or the theft of sensitive data. Remote insurance should cover data breaches of remote workers and other cyber security risks.

Injuries and illness: Businesses can be responsible for the injuries and illnesses that hurt remote employees, so long as this happens while the employee is performing work tasks at home. Remote work insurance should coverage medical expenses, lost income, and other business continuity expenses.

Equipment protection: Standard property and equipment insurance may not extend to equipment used outside your company’s main business location. An insurance policy tailored to businesses with remote workforces can provide coverage to devices given by the company that are used by remote workers at home.

Types of Insurance for Remote Workforces

Cyber insurance for data security and privacy protection

Cyber insurance can cover a variety of cyber incidents and expenses that can be devastating for companies of all sizes. Businesses with remote workers are highly recommended to obtain cyber liability insurance for data security. While cyberattacks are not unique to remote working, remote workers come with more risks. Here are the main cyber risks associated with remote working.

Unsecured connections: Home internet connections are often unsecured. This makes them vulnerable to cyberattacks.

Phishing scams: Phishing scams are one of the most common cyberattacks in existence. Phishers trick employees into opening messages to gain access to sensitive data or spread malware.

Insecure devices: Device management is often a problem. Remote workers may use personal devices to access company data, potentially leaking sensitive company and customer information.

Insecure data storage: When data is dispersed to unsecure homes, it may be leaked or stolen due to a lack of data storage security. Cyber liability insurance can help cover expenses related to data breaches and crisis management.

Liability insurance for home office accidents and injuries

According to OSHA, while an employee is working from home, injuries and illnesses that occur at their home office may be considered work-related if they are directly related to the performance of work. This means that the employer could be liable for the injuries of remote workers.

Equipment insurance

Insuring the equipment of remote workers can be complicated. Businesses might need an insurance add-on or endorsement.

Equipment insurance for remote workers can protect the assets of a company, including laptops, computer monitors, smartphones, printers, microphones, and other valuable devices. If these items are lost, stolen, or damaged, business continuity can be disrupted. With the help of insurance coverage, businesses can easily replace the lost equipment, ensuring business operations can quickly return to normal.

Business interruption insurance for remote work disruptions

Business operations can be interrupted by various risks, including remote work disruptions such as power outages. If your employees are suddenly unable to work, business interruption insurance may be able to provide valuable financial assistance as you search for solutions. Common covered expenses of business interruption insurance include:

• Lost income due to halted business
• Relocation costs
• Employee wages
• Taxes
• Loan payments

Health insurance options for remote employees

When it comes to offering health insurance to employees, businesses have several options. A common complication is that the state of the company headquarters differs from the location of the remote worker. Businesses need to ensure that the health benefits they offer to remote workers are adequate.

Business owner’s policy

A business owner’s policy (BOP) insurance benefits small businesses. Each BOP bundles together several essential coverage types, including business property and liability. While a business owner’s policy might not suit your business if your workforce is entirely remote due to the commercial property coverage, small businesses with a split workforce should consider a BOP for its convenience and cost-efficiency.

Workers' compensation coverage for remote injuries or illnesses

Workers’ compensation insurance is required by law in most states. It covers the medical expenses and lost income of employees who get injured or ill while on the job. The good news is that workers’ comp typically covers the injuries and illnesses of remote workers who are completing relevant tasks during work hours.

General liability insurance

General liability insurance is essential for businesses that interact with third parties. Businesses with remote workers should still consider general liability insurance since it may bridge gaps within the BOP or other policies your business carries. A general liability insurance covers liability claims for businesses, which typically include:

• Damage to property caused by your business’ products or services
• Advertising injuries (e.g. slander, libel, and copyright infringement)
• Injuries to people on your business property

Errors and omissions insurance

If your business offers professional services, errors and omissions (E&O) insurance is important. It is also known as professional liability insurance, and covers:

• Your company’s mistakes and errors that negatively impact a client or customer
• Claims filed against you due to professional mistakes and negligence
• Medical malpractice

Certain industries are highly recommended to obtain E&O insurance regardless of whether their employees work remotely. Professions that can benefit the most from professional liability insurance include:

• Architects
• Accountants
• Brokers
• Consultants and advisors
• Engineers

Choosing the Right Insurance Policies

1. Assessing the specific needs of your remote workforce

Look at how many remote employees your business has, potential risks and liabilities, and how much coverage you need. Are there any specific risks that your business faces due to having a remote workforce? Do your employees have access at home to sensitive customer information that could be leaked? It’s important to choose your insurance policy based on need so you will have adequate coverage to mitigate relevant risks.

2. Evaluating insurance providers and policies

The insurance provider you choose should have a good track record of covering claims of businesses. Read online reviews and customer testimonials to get a better idea of whether an insurance provider or policy is suitable for your business.

3. Customizing insurance plans to fit your needs

Many businesses find themselves needing specific insurance add-ons and endorsements. If your business faces challenges that aren’t covered by the standard commercial insurance policy, you can customize an insurance plan to fit your business model and budget.

4. Seeking professional advice from insurance brokers or consultants

Insurance brokers, agents, and consultants have years of experience in finding businesses suitable insurance policies. By chatting with an insurance expert, they can quickly direct you to several potential insurance companies.

Implementing Risk Management Strategies

1. Establishing remote work policies and procedures

Businesses with a remote workforce should set clear policies and procedures. This includes:

• Contact information: Who should your remote workers contact daily for check-ins or handing in work?
• Emergency contacts for medical care: If your employee gets injured or sick due to a work task while at home, who should they contact? What is the protocol, and how can they claim workers’ comp?
• Data security requirements: Do you expect your remote workers to use VPNs, specific company devices, and other measures to ensure safety? Make sure to clarify what cyber security requirements your remote workers need to comply with.
• Legal compliance: If your business has a workforce spread across state or even country borders, it needs to comply with any local labor laws, health and safety standards, and data protection regulations. Failing to comply can result in fines and other legal issues.

2. Providing cybersecurity training and resources

The prevalence of cybercrime means that all companies should invest in cybersecurity training and awareness. Providing your work-from-home employees with essential cybersecurity knowledge can greatly reduce the chances of them falling to a phishing scam or other type of cyberattack.

3. Offering ergonomic assessments and equipment

At-home workers may be prone to certain injuries, such as carpal tunnel syndrome due to sedentary work tasks and repetitive motions. Ergonomic equipment and assessments can go a long way in preventing injuries due to repetitive, sedentary work tasks such as typing in a chair. Here are some good tools and resources to consider offering your remote workers:

• Ergonomic chair
• Ergonomic mouse and keyboard
• Awareness of injuries that come with sedentary work tasks and lifestyle
• Remote ergonomic self-assessments and checklists
• Lists of recommended tools and equipment

In addition, OSHA requires employers to be responsible for ensuring safe working environments, even if the employee is working remotely. This means that providing ergonomic options and support to remote workers is often a requirement for OSHA regulatory compliance.

4. Promoting health and wellness initiatives for remote workers

A company with remote workers should consider health initiatives that support fitness and wellness. This can also include bonding activities for remote workers so they feel more connected with the company culture and fellow employees. Working remotely may cause workers to have decreased productivity, wellness, and morale if the company is unable to adapt to the shifting expectations and needs of remote workers.

5. Creating contingency plans for business continuity during remote work disruptions

It’s a good idea to create a detailed action and crisis management plan that covers what needs to be done in case of remote work disruptions. For example, if a natural disaster causes power outages and remote work disruptions, how will the business maintain regular operations? Do replacement hires need to be hired and will the business need payroll assistance?

Insurance can help businesses with many risks and expenses that come with work disruptions. Here are some of the best insurance companies that can benefit businesses with remote workers:

• NEXT: Offers live certificate and mobile app for instant proof of insurance.
• Tivly: Gets you fast and competitive quotes on business insurance.
• Simply Business: Obtain free and transparent quotes from top insurers.
• The Hartford: With 200+ years of experience in insurance, The Hartford offers plenty of reliable business insurance policies.
• Hiscox: Chosen by 400k+ businesses for affordable insurance coverage.

Summary

Businesses should insure their remote employees to ensure business continuity. Traditional commercial insurance policies often lack the necessary coverage for a business with a remote workforce. Essential coverage businesses should consider for remote workers include:

• Cyber insurance
• Workers’ compensation
• Health insurance for remote workers
• Equipment insurance

While remote workforces have decreased, around 12.2% of workers were fully remote in 2023. Many businesses operate with a hybrid or partially remote workforce. Adapting to the risks linked with remote work can help your business better deal with potential expenses and legal issues. Don’t hesitate to obtain insurance that aligns with your new remote workforce needs.