Impact on Office Insurance of Extensive Working From Home

With people working from home in greater numbers than ever before and some organisations considering if they need an office at all, you should consider if you have appropriate insurance protection in place.

In this post we recognise that we have limited historic precedence to look at but exploring some of the key considerations may be helpful to reduce risk.

Employers Liability

If a physical office closes whether temporarily or permanently, organisations need to ensure that they leave Employers Liability cover in place. Some organisations are already thinking about how they ensure their team working from home are in a suitable environment and would they, as employer, be responsible for an injury in the home due to inadequate seating or trailing cables. Be sure to have a specific policy in place to report and investigate work-related injuries or conditions that emerge at a colleague’s home. Also if you are using some electronic face to face communication would you comment on what you can see is an unsafe environment. You would in the office and working from home doesn’t remove your duty of care.

EL is a legal requirement and it can take many years for employees to become aware of injuries or illnesses suffered whilst working. An employee can be anyone who is contracted to work for the organisation whether in writing or verbally so this could include volunteers, work experience, self-employed or borrowed persons.

Organisations need to check policy coverage and wordings to ensure it is covering people working away especially if they have people placed overseas. Generally, policies cover employees working overseas on a temporary basis.

Contagious disease is generally excluded from EL policies, however cover may be triggered if the illness arose due to or during the colleague’s employment.

Office Buildings & Contents

With entire organisations working remotely or spending much less time in the office, it is important to recognise the potential increased exposure. Obviously empty premises may attract vandalism or forceable entry, whilst both buildings and contents can suffer damage from burst pipes and ingress of water, particularly as the winter months come round. Most insurance policies restrict cover or impose higher excesses when a property isn’t occupied, especially if it isn’t regularly attended.

Office Equipment Removed from the Office

Most insurance policies will cover items temporarily removed elsewhere and whilst not defined “temporarily” may usually be interpreted as up to 3 months. If the organisation is actively talking about never returning to work for all their team’s activity and the time in the office is less than the time outside the office then equipment may not be covered by the temporarily removed extension. Insurers are though sympathetic to Covid related changes and their regulator, the Financial Conduct Authority, has been clear they must be reasonable.

Items away from the office may be covered under an office policy but check this includes computer equipment that is not designed to be portable and that it is insured for the replacement value.
It would also be worth reviewing whether any equipment breakdown insurance is included within the Office policy you have in place as this is probably more crucial where people have high value items at home, such as a graphic or web designer may use.

One way to reduce the risk of loss or damage to company property is to have a written policy in place. If you are issuing electronic equipment to your team, have them sign a suitable document that confirms their responsibility for the equipment and specifies who is responsible for maintenance and damage.

Public Liability

Exposure to Public Liability also should continue to be covered as these type of claims can stem from an allegation that the organisation is liable for an incident that took place on its premises or that has been caused by an employee visiting a client or third party for work related purposes. The building owner is responsible for property owners liability which is useful if the property isn’t being attended or repairs undertaken when they should be resulting in damage to 3rd parties or their property. If you do rent premises check your lease as to whom is liable for repairs.

Business Interruption

Most Business Interruption cover included within Office policies will cover circumstances where physical damage occurs to the Office and your income is impacted as a result. Many policies have always had pandemic exclusions as standard meaning there is limited opportunity to claim where the office could remain open.

A more contentious area however is whether Covid-19 can contaminate physical objects and workplace surfaces which in turn would force an organisation to cease operations whilst surfaces are deep cleaned. In these scenarios business interruption insurance may provide some protection. Still, keep in mind that Insurers may still reject a claim. As with any loss, policy wordings are critically important and could make all the difference when it comes to determining the validity of a claim.

Directors and Officers

Stakeholders could take legal action against your principal officers and Trustees if you fail to respond appropriately to Covid-19 concerns, for example stakeholders may contend that the senior management failed to develop adequate continuity plans to defend the company’s financial performance. It should be noted that most D&O policies exclude cover for bodily injuries but may offer some protection depending on the specific allegations. As such it is important to review the scope of the D&O cover to confirm you are covered in the event of an incident.

Colleagues should review their own insurances

Colleagues themselves should also review their home insurances as some will have remodelled or renovated their home to accommodate more home working, whether the budget was large or small they are adding to the value and increasing their attractiveness to thieves. Most household insurance policies permit an element of home working but that depends on the risk involved. If a colleague has stacked a supply of printed material like letters, brochures and envelopes next to electrical equipment and it catches fire who would be liable for the resultant damage to the house and furnishings? The house Insurer, your organisation or no one meaning the damage is uninsured. It may also be worth noting with their insurance provider that they are working from home as some household claims from work related matters may not be covered.

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