Working from Home: Teleworking Exposures and Risks to the Employer

At the peak of the pandemic, 69% of employees were working from home. That number hasn’t declined very much since. Most companies in the U.S. still offer at least some remote work. Working from home is still more popular than ever. That’s why it’s important for property & casualty producers to know the many exposures a company with remote employees can have.

When the COVID-19 pandemic struck, many employers had to implement work-from-home fast. Because of the urgency, risk management issues were often a secondary concern. While most businesses have returned to more-normal operations since then, many companies have kept some of their work-from-home options. Because of that, many unaddressed risk management issues have persisted.

Teleworking risks are managed through commercial and personal risk management and insurance policies. In this article, we detail the risks and exposures unique to teleworking employees. Once the most important risk management issues are identified, employers and commercial insurance producers can find the best suited policies and endorsements needed to deal with those risks.

Teleworking Exposures and Risks to Employers

Workers Compensation Risks

When an employee teleworks, the employer remains responsible for safety. Employers are liable for workers compensation for remote employees just like when the employee is working in the office. However, a home presents injury risks that may not arise at the office.

Companies can’t control an employee’s home-work environment. A worker may live in a home that is cluttered with hazards that wouldn’t exist in the office. For example, an employee may share space with their child’s science project or their spouse’s hobbies or work. Spouses may be teleworking in the same space, or children could be home-schooling in the same room.

Even if the company provides work equipment like computers, printers, phones, etc., employers still can’t control how employees use them or how employees set up their home office with the equipment. For example, ergonomic injuries can result from behaviors like using a laptop on a couch or bed rather than at a desk.

Employment-Practices-Related Risks

Whether their employees work at the office or from home, employees can still allege any of the following:

• discrimination

• wrongful termination

• sexual harassment

• retaliation

• and various other workplace allegations (e.g., invasion of privacy, defamation, failure to promote, etc.)

Employers can be held liable for any of these claims, even from teleworking employees.

General Liability Risks

A company can face liability risks from a remote worker that it doesn’t face at the office. For example, equipment supplied by the employer that starts a house fire or shocks a child could result in a family member's claim against the company.

Likewise, any injury to clients visiting the in-home office or delivery persons delivering equipment or supplies could result in a claim against the employer.

Auto-Related Risks

Employers could face new exposure to vehicle accidents from work-from-home employees. If the company is named as a claimant, the employer’s business auto insurance can cover auto accidents that occur while an employee is teleworking.

For example, a private trip to the post office or elsewhere may be construed to be business related. If that trip causes harm to the property or person of a third party, the employer may face a liability claim.

The employer might also be named as a defendant if the employee is involved in an accident while traveling between their home and the office. It might not matter whether the employee is on paid time.

Property Risks

If an employer provides a computer or any other equipment to be used at an employee’s home work site, it may be exposed to risks that do not occur in most offices.

For example, the equipment might be damaged by pets, children, or spills. Friends of the family might have access to it. A home may not have the level of security or fire prevention the company office provides.

Data Security Risks

As more organizations allow teleworking arrangements, the challenges posed to privacy and security must receive appropriate attention to assure that the risks are assessed, analyzed, and addressed.

Many companies have established internal controls to monitor and protect the transfer of information both inside and outside the walls of the company. However, gaps can still exist. Some examples include the following.

• Although laptops and smartphones are commonly used by teleworkers, few companies have adopted privacy-enhancing devices to help safeguard sensitive information.

• Teleworkers regularly use their own personal computers and smartphones for work purposes, and the hard drive and email encryption tools commonly found on employer-supplied devices are of little help when employees use their home computers for work-related activities.

• It is common to allow teleworkers to use wireless internet connections, but the use of wireless security measures is not widely required.

• Many companies have policies on downloading non-company-approved software and using peer-to-peer file-sharing applications for teleworkers. However, the use of certain tools such as firewalls to enforce such policies is only applicable when employees are connected to the internal office network.

Intellectual Property Risks

Works created or devices invented by an employee using company equipment while on company time are generally considered "works for hire" and automatically become company property. Likewise, the company automatically owns works created by a telecommuter on company time.

But what about works created on the employee's own time using tools or software provided by the company? What if the telecommuter doesn't have fixed hours?

Employers can prevent such questions from becoming problems by detailing telecommuters' responsibilities, the projects they are to work on, and the company's ownership interest in these projects.

Teleworking Insurance Coverage for Employers

The popularity of teleworking means these new liability risks will be permanent issues for many companies. Commercial property/casualty producers should become very familiar with these exposures so they can offer solutions and appropriate coverages to fill the gaps.

What’s the best way for producers to learn more about these risks and exposures, along with what coverages producers can offer?

Order WebCE’s new online course Working from Home: Exposures and Coverages to learn more about the risks and exposures of working from home and what types of insurance policies are available to cover these exposures.

In this course, P&C producers can expect to learn:

• Advantages and disadvantages of teleworking for employers and employees

• Teleworking exposures and coverages for the employer

• Teleworking exposures and coverages for the employee

• Best teleworking practices for employers and employees

To order this course and more, visit the WebCE catalog.