In response to the COVID-19 pandemic, many South African companies have shifted to more remote operations where possible although we have moved to level 1.
Remote working may become the new norm for many, however, business owners need to be aware of how this impacts their risk exposures and insurance coverage. Policy terms may no longer align with the “facts on the ground” of remote operations, which could lead to coverage gaps and/or disputed claims. To date, commercial/business insurance policies were written on the premise that the policyholder’s employees mostly work in the business’s offices. In a remote workforce world, many policy terms will no longer match that risk profile.
While companies’ insurance policies and risks differ, there are some common issues that may arise under several types of commercial/business insurance policies in connection with a remote workforce.
Insurance cover you need for your remote workforce:
With daily news of data breaches and cyber attacks not only on giant enterprises but small businesses too, it’s vital to ensure your business is protected. Many businesses rely on limited cyber insurance included in their existing commercial/ business insurance policy. However, a dedicated cyber insurance policy is a must-have for many businesses shifting to a permanent remote workforce. Read more about cyber insurance here
Liability insurance often provides coverage for a business from liability, injury, damage, negligence losses that overlap with dedicated cyber insurance, such as coverage for funds transfer fraud or computer fraud.
Where there is such an overlap in your business coverage, you should carefully evaluate the policies’ “other insurance” provision, which dictates which policy provides coverage on a primary or excess basis. Some policies even provide that otherwise covered loss is excluded where it is covered under another policy. Coordinating cyber and commercial crime coverage is crucial to avoid unexpected gaps.
Employers’ Liability Insurance
Employer’s Liability covers you for damages that you or any member, partner, director, principal or employee of your business may be held legally liable to pay following an incident in the course of or in connection with the persons employment with you. Employers are generally responsible for providing a safe work environment, regardless of whether the employee works remotely or on-site
These lines can become more blurred for remote workers.
When remote work is instituted on a permanent basis, logic would suggest that the location of the worker does not matter. But insurance policies typically provide coverage for loss or injury within a “coverage territory,” and in employers’ liability policies that territory is often limited. Businesses should therefore make sure that their policies’ coverage territory includes everywhere their workers may be located.
Less control over activities of remote workers can also blur the line of what is covered injury and what is not.
Property insurance typically covers commercial locations that a company rents or owns and property within those locations.
Most commonly in remote work situations, such property consists of equipment like computers and related devices. Businesses shifting to permanent remote work should evaluate whether their property policy terms cover such equipment while working off site the registered business physical address on the insurance policy.
Coverage for physical and non-physical property will depend on the specific language of the policy, and should be evaluated in tandem with the company’s cyber insurance and commercial business insurance policies.
If you are choosing to shift to more permanent remote business operations, consult with your VCIB insurance broker to review your current coverage to identify gaps, required changes in policy language and ensure your business is covered for new risk exposures.