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Telecommuting: Benefits and Potential Liability

Telecommuting can mean anything from a formal arrangement to an occasional project completed from home. This work arrangement can benefit both employer and employee. However, permitting employees to work offsite can create liability for unprepared employers. You can reduce exposure by planning ahead and creating policies to guide your employees.

What are the benefits of telecommuting? 

  • Reduced costs, such as office space
  • Reduced relocation costs
  • Attracting the best talent
  • Employee retention
  • Accommodating employees with disabilities
  • Supporting environmental objectives

What are the potential liabilities to employers who allow telecommuting? 

  • Auto exposure: What happens during your employees' commute is not your responsibility, but what takes place in the course of your employees' work is. A simple trip to the post office could be considered business travel. If an employee has an accident while driving on business, or what could be construed as business, your organization will be a likely target for a claim or lawsuit. Therefore, ensuring that any employee who you allow to telecommute has sufficient auto liability coverage is essential if there is any possibility that they will be driving in the course of their work.
  • Workers' Compensation: Work-related injuries incurred at a remote worksite during agreed-upon working hours are covered by Workers' Compensation. The supervisor should advise the employee that injuries will be handled in the same manner as reports of injuries at the primary worksite. Discuss with your HUB advisor whether training, site inspections and other techniques for managing risks is recommended.
  • Equipment: Providing all office equipment (computers, copiers, printers) for employees who work at home not only gives you more control over that equipment, but also helps your organization avoid responsibility for damages to the employee's personal equipment. It's important to check with your IT team to make sure your telecommuting employee has a secure connection to your organization's network. Firewalls, virus scanners and similar security measures between telecommuters and your internal network are essential to reducing the risk of having your data and network compromised.

Determine whether the employee's homeowner's policy provides adequate protection. If not, you should consider paying for increased coverage. If your organization decides to provide coverage for offsite equipment, make sure you have discussed this with your HUB broker.

  • Third Party risks: There is no public liability for an employee working from their home, provided they are not using the premises to engage the public. However, if your employee receives visitors for work-related matters, you may be liable in the event they are injured.
  • Cyber-risk: Your organization may face an increased risk of intellectual property loss and/or disclosure of customer information. Make sure you have clear rules in place regarding the use of proprietary and personal information, the value of that information and the consequences of disclosure.

What is the best choice for your business? 

It's up to you to determine whether telecommuting works for your business. Some jobs will always need to be done onsite, and not every employee is suited to working with reduced supervision. On the other hand, telecommuting can provide significant savings and can serve as a low-cost "perk" for valued employees.

When weighing the costs and benefits of allowing telecommuting, be sure to speak to your HUB broker about the exposures you may face if you allow telecommuting. If you decide to allow employees to work from home, be sure to inform your advisor so you can obtain the right coverage to meet your needs.