Insurance risks relating to working from home?

The increase in hybrid working following the pandemic has given way to a “work from anywhere” (WFA) culture for many organisations, but employees choosing to locate themselves overseas expose themselves to risks according to a recent report.

A survey has found that many people are working abroad without insurance and companies with workers unofficially based overseas are more likely to have their business insurance invalidated, or have an increased exposure to cyberattacks.

Both employees and employers should give consideration to flexible working policies to ensure they are fit for purpose, and that employees understand the consequences of international working. Even where employers have insurance for staff working remotely, the terms need to be carefully considered, detailing what is not covered.

Working overseas poses data transfer risks because the employer frequently lacks control over the security of the system used. In some cases, accessing customer data from overseas risks a technical breach of GDPR. Similarly, if the employee’s device is compromised, business systems may be vulnerable to hacking or other attacks.

In the UK, firms are required by law to have employee liability insurance, which may be invalidated if employees work abroad, and the insurer is not informed.

Businesses remain responsible for the health and safety of their employees regardless of where they work.

The following is worth considering:

  • Insurance: Before permitting an employee to work from abroad audit all insurance policies and check whether the existing cover is adequate for an employee working overseas. For example, does employer liability insurance cover overseas working?
  • Benefits: Companies will also need to think about whether benefits such as private medical insurance are valid should the employee work from abroad.
  • Policy changes: Travel insurance is often based on travelling for leisure or limited overseas travel. Employees may need a separate policy encompassing business travel insurance should they be carrying out work abroad.
  • Communication: The key message for employers is to ensure that there is a clear understanding on what insurance is necessary and who is covering the cost.  Messaging should be communicated clearly to employees.

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