How the future of work could affect insurance for businesses

Russell Brown
November 8, 2022

What is the current situation for insurance for businesses?

Until the Covid-19 pandemic in March 2020, the view was that businesses provide insurance such as Employers’ Liability during normal day-to-day operations. Employers’ Liability insurance is compulsory, protecting a company’s employees and workplace visitors for accidents where a claim needs to be settled.

Following the Covid-19 pandemic, the definition of a workplace has changed. It’s no longer solely an office or factory, now a workplace is likely to include an employee’s home.

Although the world has gotten used to Covid-19, it is something we’ll all have to live with for the foreseeable. Therefore, all employers have had to consider what future working arrangements they need to have in place based on the type of business.

Companies primarily office-based before the pandemic have taken the opportunity to discuss these future arrangements with employees. Many have adopted hybrid working which includes a combination of office and home working where possible. It does seem very unlikely that in the short-term there will be a move for people to return to working in the office full-time.

How could this change in working arrangements affect the insurance businesses’ needs?

Companies will need to consider the events they will need insurance for and how this will impact their current insurance policies.

This means that while they’ll still need mandatory insurance, such as Employers’ Liability, some requirements will likely have a greater impact on the insurance coverage and premiums moving forward.

This could include regular home Health and Safety checks to ensure employees’ working environment meets the company’s rules and regulations. Insurers could require all employers to provide evidence that their employees have passed annual health and safety tests to ensure ongoing compliance. Having this information on file ready to present to insurers if an accident happens at home to an employee during their working day would provide comfort to businesses for future claims that they won’t be rejected.

It’s also worth pointing out that the working day has changed for many, from a strict ‘9 to 5’ to more flexible arrangements to accommodate childcare and other responsibilities. This change in working hours should be taken into consideration by employers and insurers for accident claims that in pre-Covid times would have been outside regular working hours.

The other types of insurance policies likely to be affected by changes in working arrangements are:

  • Corporate health insurance policies – companies will need to ensure any claims on these policies relating to Covid-19 made by insured employees and their dependents will be covered by the insurer
  • Corporate travel insurance policies – companies will need to ensure any claims on these policies relating to business travel affected by Covid-19 by insured employees will be covered by the insurer

What are the next steps for companies?

Businesses should review all their current insurance policies to ensure they have the necessary coverages in place to protect against these changes in working arrangements. The implications of not getting insurance coverages right could be serious for the company. If this isn’t something they’re looking at already, they should start the process sooner rather than later to avoid potential future problems for themselves and their employees.

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Author

Russell Brown

As senior consulting manager, Russell joined Sovos in 2021. A career spent in insurance premium taxes on global insurance programmes has given him many years of experience in handling compliance and advisory challenges from location of risk and IPT liability to co-insurance and financial interest clause cover. He has worked for financial service providers EY and TMF and more recently as head of indirect taxes at Tokio Marine HCC. He has been a member of both the ABI and IUA Indirect Tax Working Groups as well as being an active participant in regular Lloyd’s Indirect Tax Forums.
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