Do your insurance policies cover risks which may arise from working at home arrangements?
Working from home is becoming much more common and many firms are allowing their employees do so on either an occasional or regular basis. However we are finding employers are not considering how their insurance policies may need to adjust to respond to these changing risks and they may left exposed.
Can Employees demand more flexible work arrangements?
Current Fair work legislation allows employees who have been with the same employer for 12 months to request flexible working arrangements if they meet one of the following criteria:
In addition, many Employers are now offering flexible working arrangements to all employees, to make their working life much easier and a desire to retain happy productive staff. It is not just those in the fair work legislation listed above. Fortunately due to advances in technology, it is possible for more employees to work from remote locations including their homes or even a local café.
So what areas of Insurance do we need to think about?
We can sum these up with the following types of insurance policies:
Employees can still get injured on the job at home. Employers are required by law to have workers’ compensation insurance in place. Depending on the jurisdiction, you made to advise the relevant insurer or authority of the number of employees working from home, how often and the type of work they are performing.
Public Liability Insurance
You could still injure a third party. Most policies for liability will cover you anywhere in Australia as many employees are meeting with customers or clients outside of their normal place of business, whether that be in their own homes or elsewhere. However, Insurers may require disclosure as many have an expectation that these risks will be at the normal business locations advised. Disclose this just in case there are policy restrictions.
Property loss or damage
Normally an Employer will cover the “Static” risk at the location of the situation address listed in a Business or Office package policy for Fire and Perils, Accidental Damage and Burglary. However they do not think about the property away from their location address. Many employees will have their own office furniture in their home and this may be picked up by an ordinary Householders policy as it is their own property. However, some Employers provide a Laptop or Tablet Computer, often a mobile phone and other equipment they may need. In this situation we include what we call a General property policy either in a Business or Office Pack, or as “stand-alone” cover. This insurance picks up the Accidental Damage, Loss or Theft of equipment anywhere in Australia and can also be extended overseas where required. This cover is more expensive than the Static cover but gives the flexibility of cover away from the normal location of the business.
Cyber and Privacy risk
By far the biggest concern now for Employers are the Cyber risks and Confidentiality of their client’s data. Accessing Servers remotely or operating in the cloud has many securits risks that come in various forms. Data breaches or destruction of data can occur as a consequence of hacking and malicious code or by inadvertent mistake, such as leaving a device unsecured so it can be accessed by unauthorised third parties. Denial of service attacks, which overwhelm a computer system by sending an excessive amount of data to the system and preventing access to it, pose another risk.
We do now have cyber risk and privacy insurance policies to cover the cost of these risks to a business which can be increased when data can be accessed in many different ways including remotely.
Cyber risk policies generally include cover for, among other things:
Part of the underwriting process for a cyber insurance policy, often is the security technology, compliance measures, policies and protocols a company has in place for protecting confidential data and maintaining the integrity of computer systems.
Employers who have a flexible workforce must ensure that they have appropriate security measures in place to account for the increased risk where employees are accessing company computer and information technology systems externally through unsecured networks or on personal devices.
What you should do to cover off the risk of flexible working
We suggest you review your insurance policies to confirm that those currently in place are adequate to cover employees who work flexibly and/or remotely. Consideration of the policy wordings in your workers’ compensation, public liability, property and cyber risk policies is required to ensure that the scope and level of coverage is suitable for a flexible workplace and will respond to cover emerging risks.