Protecting Your Remote Business: Strategies to Mitigate Risks and Ensure Adequate Insurance Coverage

In the wake of the pandemic, numerous small and mid-sized businesses have adopted remote work as a permanent fixture in their operations. However, many of these businesses have yet to assess how their risks have evolved and what insurance coverage they require in this new landscape. To address these challenges, Risk Manager Magazine offers these strategies for mitigating risks and safeguarding against losses:

1. Conduct a Risk Assessment: Begin by evaluating your operations and existing insurance coverage to identify any gaps or inconsistencies. If your business lacks a policy for remote work or offsite use of company property, consider establishing one that aligns with your existing insurance policies or seek appropriate endorsements.
2. Ensure Compliance: Ensure that your remote work policies comply with relevant laws and regulations, including data protection, taxation, and workers’ compensation laws, to minimize liability. Notify your insurer of any policy or practice changes during a coverage period.
3. Review Commercial Property Insurance: Standard commercial property insurance typically covers property only at the insured business premises, not at employees’ homes. Ensure your policy extends coverage to business property used at remote locations, but reassess if the premium outweighs the value of your property.
4. Consider Cyber Insurance: Cyber insurance, often not included in standard policies, is crucial for businesses dealing with customer or client data. It covers first-party and third-party risks associated with cyber incidents, helping with data recovery, ransom costs, business interruption, and liability claims.
5. Maximize Existing Coverage: Optimize your existing coverage and maintain proper recordkeeping, especially if remote work has disrupted previous practices. In the event of a loss, consider multiple coverages that may apply and report potential claims promptly.
6. Follow Up on Claims: After reporting a claim, stay vigilant and follow up with your insurer. In some regions, insurers have specific timeframes for accepting or denying coverage. If a claim is denied or delayed unreasonably, seek clarification from the insurer and, if necessary, consult an insurance recovery attorney to explore options for dispute resolution.

The shift to remote work demands a reevaluation of insurance needs and risk management strategies for small and mid-sized businesses. By proactively addressing these considerations, businesses can protect themselves from potential losses and navigate the evolving insurance landscape effectively.