Are you covered under the ‘new norm’?

Since the start of the pan­dem­ic, work­ing from home has become the norm for mil­lions, but is the home insur­ance indus­try still play­ing catch-up?

Lawyer Dean Dun­ham, who presents the Con­sumer Hour on nation­al radio sta­tion LBC, has tweet­ed that some house­hold insur­ance claims have been reject­ed, seem­ing­ly because pol­i­cy­hold­ers failed to dis­close to their insur­er they were work­ing from home.

How home working can impact home insurance

He believes there is a need for greater indus­try trans­paren­cy. “After COVID-19, it appears inevitable that more and more peo­ple will work from home on a full or part-time basis,” says Dun­ham.

“Providers need to pub­lish clear terms and guid­ance on what types of work impact a home insur­ance pol­i­cy; just say­ing that admin or cler­i­cal work does not need to be noti­fied does not go far enough.

“We have been assured pol­i­cy­hold­ers do not need to noti­fy insur­ers if they are sim­ply car­ry­ing out an admin role at home, but there is no def­i­n­i­tion of ‘admin’, which leaves room for inter­pre­ta­tion and there­fore for insur­ance providers to deny claims.”

This could present a big prob­lem. In July, the Office for Nation­al Sta­tis­tics pub­lished a report on home work­ing show­ing almost 47 per cent of peo­ple in employ­ment spent at least some time work­ing at home dur­ing April. Some 86 per cent of these peo­ple did so because of COVID-19, and the cur­rent sec­ond nation­al lock­down in Eng­land and else­where is see­ing this hap­pen again.

Guid­ance from the Asso­ci­a­tion of British Insur­ers con­firms office-based work­ers who are remote work­ing as a result of the pan­dem­ic do not need to update doc­u­ments or extend cov­er.

How­ev­er, Dun­ham advis­es those who are run­ning a busi­ness from home or receiv­ing vis­i­tors at home in a busi­ness capac­i­ty should noti­fy their provider and ask for writ­ten con­fir­ma­tion that their pol­i­cy will not be affect­ed.

Bosses have a duty of care to remote workers

This is not just an issue for employ­ees. Where does it leave employ­ers when it comes to insur­ance and work­ing from home, for exam­ple with risks such as cyber­crime, data theft or loss, and pro­fes­sion­al lia­bil­i­ty and indem­ni­ty?

Ben Mason, employ­ment law part­ner at Aaron & Part­ners, explains: “Employ­ers have a duty of care towards their work­force, and their respon­si­bil­i­ties towards home work­ers in terms of pro­tect­ing their health and safe­ty are the same regard­less of whether they are work­ing from home or in the work­place.

“Ide­al­ly, employ­ers should car­ry out a risk assess­ment of their employ­ees’ work­spaces to ensure they are ade­quate and safe. Employ­ers should check they have a remote-work­ing pol­i­cy and exist­ing employ­ers’ lia­bil­i­ty insur­ance poli­cies should be reviewed to ensure they cov­er home-work­ing and that cov­er is ade­quate.

“With­out the nec­es­sary insur­ance cov­er in place, employ­ers could be found liable in the event an employ­ee is injured dur­ing the course of their work at home.”

The poten­tial for such risks with home work­ing has led to some chal­lengers in busi­ness insur­ance doing things dif­fer­ent­ly.

Ben Rose, co-founder and chief under­writ­ing offi­cer at Super­script, says the com­pa­ny pro­vides auto­mat­ic cov­er for employ­ees any­where in the UK, includ­ing when they work from home, as well as cov­er for com­put­er equip­ment any­where in the coun­try, includ­ing at employ­ees’ homes, as stan­dard.

He says: “It’s unlike­ly com­pa­ny-owned prop­er­ty will be cov­ered by an employ­ees’ home insur­ance. It’s vital employ­ers check sums insured, par­tic­u­lar­ly if you have pur­chased addi­tion­al equip­ment for peo­ple work­ing from home.”

Cyber threats to personal details also key

Home insur­ance may focus on build­ings cov­er, per­son­al pos­ses­sions and acci­den­tal dam­age, but when it comes to insur­ance and work­ing from home, the risk of cyber­crime is also impor­tant to con­sid­er.

A sur­vey of 2,500 UK employ­ees from insur­ance bro­ker and risk advis­er Marsh Com­mer­cial found more than a third (38 per cent) had not received any com­mu­ni­ca­tion from their employ­er on the addi­tion­al cyber­se­cu­ri­ty risks of work­ing from home.

Sabine Van­der­Lin­den, for­mer­ly founder of InsurTech, an insur­ance accel­er­a­tor, agrees this pos­es a risk. Now man­ag­ing part­ner of the Alche­my Crew, a new ven­ture val­i­da­tion firm for the insur­ance and finan­cial ser­vices sec­tors, she says: “As the pan­dem­ic becomes a trig­ger for more per­ma­nent change, it is like­ly insur­ers will see this as a cat­a­lyst to design, build and deliv­er new insur­ance prod­ucts.

“Many employ­ers will have to talk to their insur­er to ensure their poli­cies are extend­ed to their employ­ees’ home offices.

“They also need to sign up for remote-work­ing dig­i­tal cyber­at­tack pro­tec­tions to wipe lap­tops clean in case of a breach and have to work direct­ly with their insur­ers to map, visu­alise and assess the like­li­hood of total loss­es, to be able to esti­mate the aggre­gate finan­cial val­ue of future remote-work­ing claims beyond agreed deductibles.

“One oth­er emerg­ing area receiv­ing high inter­est is men­tal health insur­ance, par­tic­u­lar­ly for lone work­ers with no remote super­vi­sion.”

Van­der­Lin­den pre­dicts we may now see fur­ther growth in on-demand and usage-based insur­ance, which she says is “grad­u­al­ly becom­ing the way to mit­i­gate risk for some small­er busi­ness mar­kets”. 

Jan­thana Kaen­prakham­roy, founder and chief exec­u­tive of insur­ance start­up Tapoly, also sees COVID-19 as ush­er­ing in a new era for insur­ers con­cern­ing remote work­ing.

“Exist­ing pack­ages were not cre­at­ed with the cur­rent sit­u­a­tion in mind, so insur­ance needs to adapt to ensure it is fit for pur­pose and does not leave peo­ple work­ing from home exposed unwit­ting­ly,” she says.