Are My Remote Workers Covered on My Workers’ Comp. Policy?

Don Shampine
Donald Shampine, CIC, CKM President & CEO, Michigan Insurance Group. Independent agent of Retailers Insurance Company

Are your remote workers covered under your workers’ compensation policy? Unfortunately, the answer is – sometimes. Much depends on the nature of the injury, as well as the details of the policy.

Workers’ compensation is meant to provide benefits to employees whose injuries “arise out of and in the course of employment.” “Arising out of” means there must be a connection between the accident and the employment. “In the course of employment” means that the injury occurred while the employee engaged in a business activity. Often this is very clear when at your place of business but might begin to blur when employees are working remotely.

In fact, it is common for employers to assume they don’t need workers’ compensation for their remote workers. Yet, claims history does not support this and although each case is unique, based on the specific circumstances of the claim, most have found that workers’ compensation was not only needed but legally mandated.

To help protect yourself, you should have a remote working policy. This policy should include what positions are eligible for remote work, what the expected availability and responsiveness  of the employee is, should include a method for time tracking, and have a clarification of duties and responsibilities while operating remotely.

There should also be clarification about working from home versus working from anywhere. Can they work at the local coffee shop, at a friend’s house, or out of town? Can the employee move out of the area or out of state? Careful consideration should be given before allowing a remote employee to move as it may have implications to both you and your employees with respects to local and state taxing authorities. Another issue is workers’ compensation laws change from state to state.

You should establish a set of office standards for your remote workers. These standards should include your approved remote work hours. It is a good idea to invest in a time tracking tool that allows for clocking in and out. You should define the scope of work that can be done remotely and provide training and the tools necessary to properly execute their remote duties.

Your remote working policy should include a process on how to file a claim if an accident or injury should occur and make certain the employee understands that they must notify you immediately. Failure to file a claim timely could jeopardize coverage and expose the business to potential fines and penalties.

Maybe the most important thing you should do to ensure you have proper coverage is disclose the remote working positions to your insurance carrier. Disclosure to your carrier is going to be key to having coverage in place. Don’t assume your workers’ compensation policy will adjust to your changing business practices. Communicate with your agent about all business operational changes to ensure that your insurance carrier is aware, and the risks are still acceptable.

Remote workers are likely here to stay, and if they’re part of your new way of doing business, you must make adjustments to ensure your insurance program supports you if you incur a loss.

[Read More Articles Like This]