Hybrid Working – Insurance Considerations

COVID-19 raises several concerns, particularly if guests, customers or employees allege they became sick due to your business’ negligence. However, sickness is not the only consideration. A number of insurers are excluding COVID-19 at renewal and depending on the insurer and trade, some will exclude Public Liability and/or Employers Liability. With this in mind, it’s important to take the following insurance considerations into account:

Public Liability Insurance

Public liability insurance protects your business from financial loss should you be liable for property damage or personal injury caused by your services, business operations or employees to third parties. It can protect you from costs associated with bodily injuries, damage to third-party property, personal injuries, medical expenses, legal concerns and more. When it comes to COVID-19, public liability policies should provide cover and allow you to defend claims. However, for a claim to be valid, the claimant would have to allege the disease was contracted due to the insured’s negligence and detail how, when and where they got sick—which could be difficult.

Directors and Officers (D&O) Insurance

Court actions and Legislation has thrust your business decision making under the spotlight. As a director you are responsible for ensuring the firm has been diligent in its decision-making. With the additional pressures of health & safety obligations and HMRC implications etc, you are only human and mistakes happen. Shareholders and other stakeholders could take legal action against your business should you fail to respond appropriately to COVID-19 concerns. Specifically, stakeholders may contend that your senior management failed to develop adequate continuity plans or detail how COVID-19 could impact 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 your D&O policy to confirm you are covered in the event of an incident.

Employment Practices Liability

As aforementioned in the HR implications earlier in the document, there are grounds to check with your insurance broker as to whether you have this cover in force and the detail/limits of indemnity. There is likely to be friction when asking employees to return to an office environment and this could be an imperative extension to your Directors & Officers insurance, to fortify your internal HR procedures.

Employers’ Liability Insurance

In instances where an employee believes they contracted COVID-19 at work, several employers’ liability concerns come into play. Notably, when it comes to workplace illnesses, most claims are only valid if the illness is occupational in nature. Contagious diseases are generally excluded from employers’ liability policies. However, cover may be triggered if the illness arose due to or in the course of the worker’s employment. In general, these scenarios are examined on a case-by-case basis but could include instances when a health care worker contracts COVID-19 at the medical facility at which they work, an airline employee contracts COVID-19 from a passenger, or a hospitality worker contracts COVID-19 that is later linked to a large event at which they worked.

Home Working

There are a couple of areas to pick up on here. First is the Public Liability exposure. Most home insurance policies do not cover homeworking automatically so you need to check that your provider can note it. Where each home insurance provider may differ is with extending cover to work visits to the home i.e., clients walking through your front door. In the unlikely event of a trip or slip in the home by a visitor, you want to ensure that your home insurance will cover a claim, or your commercial office or commercial combined insurance policy is extended to your employees’ homes.

There is also a threat to data protection and cyber-crime exposures, whilst piggy backing off the home server or losing vital personal data such as credit card details or passwords. Fortifying employee’s IT equipment with encrypted software and putting in force a robust cyber insurance policy can help to eliminate the potential downtime and financial losses.

Equipment away from the Premises

Your business will have computer equipment leaving the office during hybrid working patterns. Most of this will be laptops and desktops but depending on your needs, there could be more specific equipment or machinery too. Most policies can be extended to include these items away from the office/main insured address, so it is important to check this. It would also be wise to keep and update an equipment risk register as you may find that once you have totted up all of the equipment, especially any new laptops purchased etc, that your sum insured is not adequate.

Review your existing insurance policies and their provisions to identify potential gaps in cover. Speak to one of our highly trained and professional insurance brokers who can help guide you through what insurance covers you should have in place for hybrid working.