Insurance Considerations for Employees Working from Home

July 8, 2020

There’s no doubt about it — COVID-19 has significantly impacted businesses across the nation, forcing rapid changes influenced by the struggle to stay afloat during uncertain times.

For many employers, what was initially thought to be a temporary change is now shifting to a more permanent solution. While some insurance burdens are being alleviated from having a centralized workforce, new considerations are arising with employees making the transition to working from home.

It’s essential that any business utilizing a “work from home” policy understands the implications and risks of a remote workforce so proper safeguards are in place to protect against any possible losses.

What insurance considerations should businesses consider when employees work from home?

The best approach in designing a solid risk-management strategy is to work with an insurance specialist that has experience in commercial lines and business policies. With that being said, there are a few types of insurance businesses should be aware of as a standard of protection when employees work from home.

Cyber liability insurance

In general, home networks just aren’t as secure as a centralized network and leave businesses more vulnerable to cyber attacks. If a data or software breach were to occur, there are two types of cyber liability insurance that can cover the damages:

First-party cyber liability insurance - Covers damages when your own system is compromised by an attack.

Third-party cyber liability insurance - Protects a company when a data or software breach jeopardizes clients’ information, leaving the business vulnerable to lawsuits.

Employer’s liability insurance

Even when employees work from home, it is generally the responsibility of the employer to provide a safe work environment. Liability insurance provides distinctive coverage for injuries not covered under worker’s comp, and it’s essential the definition of covered employees is established in the business’s liability policy (considerations for independent contractors, etc.).

Commercial property insurance

When a company converts to a remote workforce, additional regard must be given to covering property outside of a company’s main location. A business utilizing remote workers should review their property coverage limits to establish protection for property such as computers and computer systems, cellphones, hard drives, and related devices.

A company should review the language of the policy as it relates to both physical and non-physical damage to make sure there are no gaps in coverage.

Directors and officers liability insurance

A wide range of claims can put a company’s leadership at risk and be the culprit for heavy financial losses.

Some examples of claims:

  • A suit from shareholders over the company’s stock price
  • Mismanagement suits from investors
  • Failure to comply with laws and regulations
  • Regulatory claims
  • HR lawsuits

A directors and officers liability policy is a good choice to protect company officer’s against claims in which the company cannot indemnify the individuals.

What additional considerations should businesses review for work from home employees?

Homeowner’s policies

Remote employees should keep their homeowner’s insurance up to date, in case something occurs during working hours that isn’t covered by the company’s insurance policy.

Telecommuting policies

A significant worry for many businesses converting to a remote workforce is the absence of supervision. Clear guidelines should be set up by the company to assure transparency and accountability on both sides. A work-from-home agreement prevents any misunderstandings or misconceptions from remote employees.

Establish strong cybersecurity

There’s no better investment than a strong and secure connection to employees’ home computer equipment. This protects against threats like hacking and cyber crime. Employers should provide company electronics to ensure the safest connections.


As companies start to convert to remote teams of employees, the process should include a thorough review of both existing insurance coverage and policies & procedures. Working from home can be a great perk for employees, but the proper steps should be taken to fully safeguard against any possible losses that could be encountered.

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