Resources & Insights

Insuring Your Business During the COVID-19 Pandemic

August 14, 2020

Spencer Mahoney,
Executive Vice President

7-minute read

More time spent with family members. A drop in pollution. Higher admission rates into colleges and universities. For the silver-lining crowd, the COVID-19 pandemic has delivered, well, at least a few unexpected silver linings amid everything else.

We now have two more silver linings to bring to your attention along with, we’re sad to say, yet another challenge.

First the silver linings:

1. You could be saving dollars on your workers’ compensation premiums if your workforce is working from home at the moment.

In part, that’s because fewer injuries are suffered at home and those that happen tend to be less serious.

That said, employers need to think about the ergonomics of the space where their employees are working and the number of hours employees are putting in. It sounds paradoxical, but work-from-home arrangement during the COVID-19 pandemic also often mean employees work longer hours. Longer hours can mean lapses in safety and, consequently, injuries.

In case you’re wondering, home-based workers have the same workers’ compensation benefits as in-office employees – a point repeatedly upheld by the courts.

For instance, in the 2011 case of Sandberg v. JCPenney, the court decided in favor of an employee who tripped on her dog while retrieving fabric samples from her garage. She ended up receiving workers’ compensation because she was in the process of working for her employer at the time she sustained the injury.

Are there ways for employers to limit their workers’ compensation liability for home-based employees? Of course there are. Among them:

  • Establish guidelines for a home office, such as a designated work area, and provide training related to workstation setup and safety measures, including ergonomics.
  • Set fixed work hours and meal and rest periods for telecommuters. Doing so can help establish whether an injury was “in the course of” employment.
  • When appropriate and possible, conduct periodic checks of employee home offices to help identify and eliminate work area safety hazards. This can be done using virtual tools like Zoom.

So, what about those savings?

Well, remember your company’s workers’ compensation rates are based in part on job classifications.

As we’ve noted before, there are hundreds of job classifications and getting the lowest premiums possible means making sure your employees are placed in the correct classification. For example, the front-desk customer-service person in an auto body shop should not be classified as a body shop worker. And if that appointment clerk is now working from home during the COVID-19 pandemic, there’s the possibility of an even lower rate.

Misclassification of workers’ compensation codes costs employers untold amounts every year, so take the time, ask your broker to help, and walk through the various classifications and make sure your people are in the right categories.

The difference can be significant.

One final note regarding workers’ compensation premiums: if your company has been forced to furlough or lay off employees, be sure to notify your broker. The rate you pay, after all, is directly linked to your payroll.

2. Sending employees to their home offices also can help you save money on your property and auto policies.

Many office lease-holders have reduced their commercial real estate footprint as a result of COVID-19. This can influence rates for tenants and property owners.

While your policy language may differ, the standard commercial property policy says the insurer may consider the building vacant unless at least 31% of its total square footage is either rented or used for customary operations.

Even if that’s not the case, make sure you let your broker know if you’ve reduced the square footage you’re now renting. There are savings to be had.

Just as important, companies shifting to remote work during the COVID-19 pandemic also should look at whether their property policy terms cover equipment such as computers and the potentially even more valuable data they hold.

Regarding auto rates, remember those premium refunds personal auto policyholders received a couple of months ago? With everyone driving less, insurers saw a big drop in accidents, losses, and claims, hence the refunds.

For many commercial auto policyholders, premium reductions also may be in order as fleet usage has dropped.

3. OK, now for some-not-great news to consider:

Every time an employee connects to their corporate computer network from home, they’re creating possible access points for hackers to exploit.

The switch to a remote work environment means that sensitive data is being sent across companies’ networks in ways it ordinarily would not.

While someone using company-provided laptops is likely protected by internal safety measures, they could still be vulnerable if their security software isn’t updated or their remote network connection isn’t correctly configured.

The bigger problem is employees using their own equipment that security teams can’t monitor for malicious traffic. The challenge can overwhelm security personnel, especially for those companies that have previously discouraged employees from working from home.

You’ll want to remind employees to update passwords and multi-factor authentication to help keep the hackers at bay.

The bottom line here is that cyber insurance is a must-have for any company shifting to a remote workforce, whether temporary or permanent.

If your company already has a dedicated cyber insurance, the policy should be reviewed to ensure the terms match the actual risk exposure of the company’s remote operations.

Will there be an increase in cyber premiums? It’s likely there will be, but any difference in pricing may be quickly offset by some of the reductions you see in other coverage lines. So that could be another silver lining during the COVID-19 pandemic.

Spencer Mahoney is CCIG’s Executive Vice President. Reach him at or at 720-212-2051.

CCIG is a Denver-area insurance, employee benefits and surety brokerage with clients nationwide. We do more than make sure you have the right policy. We help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.


Share this:
Back to Resources

Contact Us

Call us at 303-799-0110 or reach out by filling out a short form.

Get In Touch