Ben Rose, Chief Underwriting Officer at Digital Risks.
As the Covid-19 outbreak worsened and the UK government enforced social distancing, hundreds of thousands of small businesses, and millions of employees found themselves working remotely almost overnight. The transition to this new working environment happened remarkably quickly, and for many businesses this digital only world was completely new ground for them. As we all settle into what’s been termed the new normal, this new way of working has opened up a number of new risks that business leaders need to be aware of.
Now is the time for organisations, no matter their size, to take stock and ensure they have the right processes and cover in place to keep themselves protected.
Digitising businesses
Whether it’s personal trainers running sessions via video call, nutritionists educating healthy living on social media, physical shops turning into an ecommerce operation or even art teachers organising creative lessons online, any SME looking to carry on client services as normal has had to digitise operations over the last couple of months.
For many of us, being taken out of the traditional workplace environment meant turning to tools and applications that would enable some sort of workplace normality. For others it meant a complete rethink in how to offer a service. It’s great that we’re digitising our operations, but we need to make sure we’re doing so in a safe and secure manner.
The rising cyber security threat
With so many home workers downloading applications to keep themselves connected, it’s no surprise that the cyber threats are on the increase. In fact, the UK GOV recently released guidance for business and charities after the rate of fraud started to pick up significantly.
The majority of businesses will already have taken out a cyber security policy, protecting themselves if a breach does occur. However, remote working brings up a number of additional challenges. Are WiFi networks secure? Are individuals downloading applications that they shouldn’t be? Are personal devices being used?
Business owners must therefore take responsibility in educating employees on how to protect themselves against a possible cyber attack – password management and multi-factor authentication for example. For those self-employed or in smaller organizations, who would have often met face to face with their clients, it’s also reasonable to expect they haven’t needed to take out a cyber policy until now. This should be done immediately and guidance sought from trusted sources such as the government’s NCSC’s cyber security website.
Remote working cover
On top of the obvious cyber policies there are a number of other business areas where businesses will need to check in with their insurance provider to ensure they are covered. Customers opting for a more flexible insurance provider, will be able to adjust their cover as and when is required, and since lockdown began, some providers have adapted certain covers to meet customer needs. Those stuck with more traditional firms will need to seek guidance on their options. Specific policies businesses should look to review include:
- Employers liability – This insurance covers legal costs and compensation should an employee make a claim against the business. It is a legal requirement for UK companies who employ, though is not required for the self-employed (unless stated in a contract). Many policies extend this cover to remote working automatically, but not all do so it’s important for businesses to check. This rings especially true for those smaller businesses that are now operating video conferencing systems or social media channels who may not have previously thought about the requirement of taking out such cover.
- Content and equipment cover – This covers the costs of damaged or stolen equipment and pays for repairs. Remote working heightens the risk of equipment theft or potential damage due to accidents or incidents in the home environment. Whether it’s a laptop, phone or specialist device it is crucially important that this cover is taken out. If a home fitness instructor loses their equipment for example it could spell the end of their business. Some insurers have adapted this specific policy, doubling the duration of unoccupied office cover incase of any possible theft or damage for equipment currently left behind at fixed work premises.
A view to the future
The unprecedented level of home working brought on by Covid-19 will lead to significant shifts in business and employee behaviour long after the pandemic has ended. It’s likely that we will continue to see higher levels of people working from home, on a more regular basis, than ever before. Video conferencing systems are likely to only increase in popularity as businesses small and large see the benefits in conducting meetings and client services remotely.
As this new normal becomes, well, normal, the way we do business will change considerably. So too will be the way insurance operates. Customers will want agile, modern and flexible insurance products, moving away from the traditional incumbent players with fixed term policies they have previously relied on. With working environments progressing into a more digital world, the demand for flexible, personalised digital-first services will only increase.
