Allowing employees to work from home has notable perks for small business owners, like you. These include promoting a satisfied workforce and cutting down on office space expenses. However, among all of the telecommuting fanfare, there are still potential liabilities to consider. This is especially true when you have home-based business employees.
Questions you should begin asking yourself include:
- “What concerns should I have?”
- “What guidelines do I need to follow?”
- “Where can I obtain home workers insurance?”
Work-from-home employees may expose your company to risks not currently covered by your small business insurance. Before you give employees the green light to forge their own paths in a home office, familiarize yourself with your responsibilities as a telecommuting boss.
Steps to Protect Your Work-from-Home Employees & Business
- Ensure that employees’ homes are safe for business. Before they begin working from home, require that employees comply with the health and safety policies of your business. Have your employees fill out a working-from-home safety survey, or do an inspection yourself. Check that furnishings and equipment are ergonomically designed so that the employees can work safely. You’ll also want to see that lighting and ventilation are sufficient.Be on the lookout for hazards. These can include exposed extension cords. Be sure that the residence has adequate fire extinguishers and smoke detectors.
- Once you’ve inspected the office space, take a photo for your records. Every six months, check the work environment to ensure that the employee continues to comply with the requirements.
- Designate a dedicated work area. If possible, assign the employee to a specific room or area of their home for working. This helps minimize the likelihood of injury claims. It also encourages the employee to set boundaries at home that will motivate them to remain productive.
- Ensure their homeowner’s policy is up-to-date. Require employees to check their homeowner’s insurance coverage. This ensures that their homes and property will be covered in the event of damage done during working hours. Have your employees supply you with documentation regarding this and keep it on file.
- Focus on cybersecurity. Ensure that all employee devices including laptops, tablets, and desktops are protected from intrusion. Have an IT professional set up a secure connection from the employee’s home to your company network. Connections with weak or no security leave your company open to hacking. This can put your entire business at risk. Also, insist that only employees use the company’s equipment.
- Stay in direct contact. Unless you check in with offsite employees regularly, you won’t know if they are having difficulties. Stressed workers tend to be less productive and can be prone to accidents. Make sure you have the right telecommuting tech tools in place to communicate and collaborate with your work from home employees. Check in daily and consider setting up weekly or biweekly video calls. This will enable you to see them in their home work environment. Monitoring their progress will also help you determine if an employee is better off returning to the onsite office environment.
- Review your insurance. Speak with your insurance company about having employees work from home to make sure that you are adequately covered in this area. Insurance specialists may advise that you obtain management liability insurance. Such insurance would cover the legal expenses that can arise from having work-from-home employees.
- Create a telecommuting policy. Clear guidelines regarding working from home can help prevent misunderstandings. It can also help protect you if something goes wrong with a home office situation. In your work from home guidelines, detail what is required of your employees. Be sure to include specific work hours, taking regular breaks, and adhering to safety procedures. Also, include employee rights such as your workers’ compensation coverage. Have telecommuting employees sign the document. This document should stipulate the specific details of the work-from-home agreement. Always keep these documents on file.
- Communicate that telecommuting is a privilege. Let employees know that you are allowing them to work from home as an employment perk. Make it clear that you have the right to rescind their work-from-home privileges at any time and for any reason. For example, say their home fails to meet the specified safety requirements or if their work performance suffers. Then you can ask them to return to the office.Offering employees remote jobs where they have the freedom to work from the comfort of home can enhance productivity and make your company a desirable place to work. Understand your responsibilities as an employer of offsite employees. You want to help protect them and yourself from the liabilities inherent in working from home. This way your company is sure to reap the benefits of the burgeoning telecommuting movement.
FAQs About Home-Based Business Insurance
Does My Home-Based Business Need Insurance?
Home business owners often believe their general homeowner’s insurance policy thoroughly covers them. This is not always the case. It’s often a good starting point to review your policy. You never want to leave your livelihood up to chance.
This is where additional business insurance policies come into play for home business owners. These policies can help cover:
- Work-related injuries
- Potential lawsuits
- Office and business equipment
For example, a common misbelief is that under homeowner’s insurance, your computer and important documents are covered. This is often not the case.
Remember, small businesses are targets for lawsuits. They can often find themselves without proper business insurance coverages. Don’t let that be you and your business.
Do My Remote Employees Require Liability Insurance?
You’ll be doing yourself, your remote employees, and your business a favor by obtaining the right home-based business liability insurance coverage. You’ll want extra protection in addition to your workers’ compensation insurance.
The mentality is simple. If you need business liability insurance to protect yourself at your home-based business, you’ll also need it for your remote employees.
An unhappy client could present a lawsuit for mishandling of sensitive information. This can ultimately lead to your business having to shut down. Be prepared and mitigate your business risks with the right coverage for remote employees.
Examples of Home-based Insurance
It’s easy to assume your business is adequately insured. However, if you take a harder look, there’s a lot more to consider beyond basic business policies. Consider these coverages for a deeper look:
Business Property Insurance
If you work out of home, you’ll want a form of business property insurance. You can start by taking a full inventory of your physical items and accounting for each of them. Once you do that, you’ll want to get them insured.
Commercial Auto Insurance
If you’re operating face to face with your business clients, it’s likely you’re operating a personal vehicle or a business-owned vehicle to get you where you need to be. This is where commercial auto insurance can be added onto your insurance policy. This will help cover your vehicle in the event of work-related auto accidents.
Business Income Insurance
It’s hard to predict a theft or fire. Both of these can cripple small businesses, like you, and impact your bottom line. Prepare for the unexpected with business income insurance. This coverage can help cover lost income when your business suffers a loss.
What If an Employee Is Injured While Working From Home?
Accidents happen during work, and they can just as easily occur in the home. According to the Occupational Safety and Health Administration (OSHA), small business owners are responsible for providing employees with safe work environments. All home-based workers have the same workers’ compensation benefits as in-office employees.
Cases regarding workers’ compensation have shown that laws tend to see the home offices no differently than office buildings or storefronts. For instance, in the 2011 case of Sandberg v. JCPenney, the court eventually decided in favor of an employee who tripped on her dog while retrieving fabric samples from her garage. She ended up receiving workers’ compensation because she was in the process of working for her employer at the time she sustained the injury.
What If a Customer Visiting a Home Office Is Injured?
If anyone else besides your employee is injured in a home office, you still may be held liable. This may also apply if property owned by others is damaged in the home office setting. For instance, if a client comes to your employee’s home office and drops their high-end camera, you may be held liable for its replacement. For these reasons, it’s important to have public liability insurance. Check with your insurance carrier to verify that such coverage applies to home offices.
Who Is Responsible If a Telecommuting Employee Damages Property or Equipment?
You may be able to add coverage to your business insurance policy that helps protect your business equipment not being used on your business’s property. This can include cell phones, tablets, and laptop computers at the business’s property. However, if work-related damage occurs to the employee’s home, your policy may not cover the loss. This is due to most insurance plans covering only a particular place of business.
Before such cases arise, it’s imperative that employees check their homeowner’s insurance coverage. They need to make sure it covers them working from home.
Source: The Hartford, “Liabilities of Letting Employees Work From Home” https://www.thehartford.com/ website. Accessed June 7, 2021. https://www.thehartford.com/small-business-insurance/liabilities-employees-work-from-home
© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented.