If your business employs remote workers, then you may have built-in liability risks.
As of 2014, nearly 3.7 million employees work from home at least part time, and the telecommuter population keeps growing, according to a GlobalWorkplaceAnalytics.com report.
This rise has led to a number of unique liability risks for employers, such as keeping information protected and monitoring potential workers' compensation claims. As a small-business owner, learn the liability risks of remote employees and what you can do to protect yourself.
Sensitive information at risk
Sensitive information -- in the form of emails, files, client information and more -- is constantly flowing between team members, and it can be difficult to ensure proprietary business information is protected. Cybersecurity is one of the greatest concerns when working with remote workers.
Hackers can disrupt service, install viruses and steal sensitive information. And they're not only targeting big businesses; cyberattacks on small businesses accounted for 31 percent of all such attacks in 2012, a rise of 13 percent from 2011. Small businesses can be easier prey, as they often don't have an established department dedicated to preventing data breaches and other cyberattacks. This risk only increases when employees work remotely, as there is less company oversight.
Start with these two ways to help prevent attacks:
- Improve security on devices. Beef up your Internet security with the latest technology. Establishing a strong firewall, antivirus protection and a security certificate are some of the easiest and most effective ways to protect your business. Companies such as Microsoft also regularly develop devices such as encrypted hard drives to help keep information safe. Provide employees with safe devices to use when working from home.
- Educating employees. Educate your remote employees on how to protect their devices and information. Measures such as proper password protection can help keep sensitive information from falling into the wrong hands. U.S. Homeland Security recommends checking out training resources at the National Initiative for Cybersecurity Careers and Studies.
Cyber liability insurance
Even when using preventive measures, cyberattacks are still a threat. Having cyber liability insurance can help mitigate the damage in the event of a successful security attack.
According to the Insurance Risk Management Institute, cyber liability insurance policies generally cover a range of events, such as:
- Business interruption: Addresses businesses that suffer lost income after covered events.
- Data breaches: Addresses breaches of customers' personal information. Covers costs such as credit monitoring, fines and penalties, and loss resulting from identity theft.
- Data loss/destruction: Addresses costs associated with recovering damaged or destroyed files.
- Cyber extortion: Addresses losses caused by the threat of extortion as well as any professional or legal fees.
- Computer fraud and funds transfer loss: Addresses instances in which a thief transfers your money, securities or property to another entity via the Web.
- Website media content: Addresses events in which hackers enter your business's website and alter the content.
Workers' compensation covers employees at home during work hours if the injury results from a work-related activity, according to a report by CID Management. This presents unique risks to employers of remote workers.
Here are some ways to protect against workers' compensation claims by remote employees:
- Define the work area in writing, and require employees to keep their office in a safe location.
- Educate your employees on how to maintain a safe working environment.
- Set fixed hours in writing.
Additional insurance needs
Two additional insurance policies to consider include:
- Business property insurance: If remote employees use company-issued laptops, phones or other devices, then you should have business property insurance. This insurance covers the cost of replacing devices if they get lost or broken.
- Auto insurance: If your remote employees use their cars for work purposes during the workday, then they should be covered by your company's auto insurance policy. "If the business does not own any vehicles, it can be an addition to any general liability insurance policy," says Walt Capell, president and owner of The Insurance Shop, a comprehensive online agency specializing in insurance for businesses.