10 minute read
Home truths of remote working
We’re in the midst of a work-from-home revolution, with employees expected to retain flexible work practices long after the COVID-19 health threat subsides. But the mass shift to remote working has revealed new risks for the insurance industry.
Story by Jessica Mudditt
IN SHORT
› COVID-19 has brought about a huge shift in the numbers of people working from home. For those who continue this practice on an ongoing basis, it will likely require some adjustments to employment contracts to factor in responsibility for certain risks.
› Insurers that step up to the demand for policies that can accommodate the new risk profile will stand out among the competition — and they have a lot to lose if they fail to be proactive in correctly calculating the risks.
› Post-pandemic, many businesses may choose a hybrid system, with employees working from both home and office or even using a hired space for certain meetings.
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The COVID-19 pandemic saw millions of formerly office-bound workers take up remote working in an incredibly short space of time. While some companies in the Asia Pacific are now beginning to cautiously welcome their employees back to the office — if only on a staggered basis — many have decided to embrace a more flexible style of working regardless of whether the public health situation demands it.
The benefits of a remote workforce took Steadfast Group’s chief executive officer Robert Kelly completely by surprise. What started out as an emergency response to a grave public health threat became an invaluable workplace experiment.
‘Even before the government issued advice for everyone to work from home [in March], it sounded like Armageddon was about to break out,’ says Kelly. ‘I was worried about our people getting infected on public transport, so we made the decision to have everyone working from home before it became official advice.’
Robert Kelly / Steadfast Group
Fortunately, at the beginning of February, Steadfast had run a business continuity drill for 400 of its staff in Sydney. The scenario was that a bomb blast suddenly required everyone to work from home.
‘We found a couple of holes in our plan and quickly rectified them, so by the time everyone was actually sent home as a result of COVID-19, we were ready,’ says Kelly. ‘We made the transition over a three-day period, and within a few days everything was running like clockwork — it was absolutely amazing.’
Employee productivity at Steadfast has improved with remote working, although Kelly laments the missing social aspect, which he considers important to retain in the long term. A recent Steadfast staff survey found that 64 per cent of employees would like to have a split home-office work routine, 29 per cent prefer to only work from home and 7 per cent prefer only to work from the office.
Based on the feedback, Steadfast is implementing a blended work system that will allow all employees to divide their time between the office and home on a permanent and ongoing basis.
‘If you’d said to me six months ago that we should try this out, I would’ve thought you were crazy,’ admits Kelly. ‘It’s true that necessity is the mother of invention.’
Robert Kelly / Steadfast Group
For Steadfast’s six staff members based in New Zealand, the remote working experience was more short-lived.
‘New Zealand went into a strict lockdown very quickly so everyone immediately began working from home,’ says Kelly, adding that staff have since begun returning to the office.
‘Some of our staff have children at home and it was their preference to return to the office for fewer distractions, after alternating days for a while. Our office is spacious, so no-one is on top of each other.’
Photography: iStockphoto
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Curly legal questions
With every home work environment being unique — as well as out of sight of their employer — checks are needed to ensure the safety of employees.
Steadfast staff in Australia and New Zealand were required to carry out self-evaluations and were provided with office furniture and computer equipment as needed. Kelly feels that insurance and broking personnel are particularly well placed to assess any potential risks, and he is confident that his staff would not lodge fraudulent workplace injury claims.
However, he does acknowledge that some employers could be exposed. Indeed, a recent Supreme Court decision in New South Wales found that an employer could be liable for death or injuries incurred by employees while working from home, even when the circumstances were not clear-cut.
In June, the Supreme Court of New South Wales found that under the Workers Compensation Act 1987, an insurer was liable to pay death benefits to a woman’s two dependent children after she was murdered by her de facto partner.
Her partner was also her co-worker and supervisor in the family run financial services company. The woman’s de facto partner had paranoid delusions and believed she was going to steal his clients. The time of her murder, which occurred between her usual working hours of 8.00 am and 10.00 am, was also considered material.
According to Sally Woodward, a partner at Norton Rose Fulbright, an employer has a responsibility to take all reasonable steps to ensure that an employee has a safe place of work — and they cannot contract out of it simply because an employee is working from home.
‘People have been working from home for a long time, but certainly not in the unprecedented numbers we are seeing, and this is likely to continue for a long time,’ says Woodward.
Sally Woodward / Norton Rose Fulbright
‘At the beginning of the pandemic, a lot of employers possibly hadn’t thought through the implications of having large numbers of the workforce working from home.
'As the dust settles, employers need to take a very careful look at their work-from-home policies, create clear guidelines for working from home and take all reasonable steps to ensure their workers are safe.’
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Whose fault is it?
With increasingly blurred lines between the home and workplace, Woodward says that establishing the causative factors could be complex. For example, what if an employee burns themselves on their sandwich press while making lunch?
‘There’s no question that if you were using the sandwich toaster at work and you burnt yourself, you could make a claim. So, by extension, if you were making a toasted sandwich in the course of your day’s work, then there is the potential for a claim,’ she says. ‘The test would be whether the injury occurred during the course of your employment.’
Sally Woodward / Norton Rose Fulbright
With no witnesses, workplace injury claims may need to be investigated more thoroughly, she adds, but at the same time it is difficult to refute a claim unless there are clear anomalies.
‘You’re not going to be installing CCTV in people’s homes,’ she points out.
A spokesperson from New South Wales workplace insurance and care services agency icare says there must be evidence that the worker has sustained an injury in the course of employment — and that employment was a ‘substantial contributing factor’ to the injury.
‘Employers need to encourage workers to take extra care for their personal safety whilst at home, just as they would in their normal workplace,’ says an icare spokesperson. ‘This includes making sure that the work location is appropriate ergonomically and … free of trip hazards with adequate lighting.’
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Getting ahead of the curve
Erik Bleekrode, head of insurance KPMG China and Asia Pacific, believes that insurers should be proactive in meeting the new needs that arise through mass remote working.
‘Working from home makes it hard to distinguish between work-related and non-work-related injuries. And that is something that I believe current insurance products generally don’t cater for,’ he says. ‘It’s also a new phenomenon, which means that insurers don’t have much data. There will therefore need to be more investigation and analysis of such claims.’
Erik Bleekrode / KPMG
Bleekrode believes that insurers who are ahead of the curve will differentiate themselves in the market.
‘They also have a vested interest in meeting these new needs. As the risk profile of current policies has changed because the world is changing, insurers need to make sure they have properly assessed and priced those risks, otherwise they could end up being the ultimate payer,’ he warns.
Photography: iStockphoto
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Status quo for some
However, not every business is rushing to enact permanent work-from-home policies. Karen Hardy, principal broker at Acme Insurance Brokers in Queensland, says that many of the advantages of remote working don’t apply to smaller organisations like hers.
‘Our internet connection at home isn’t reliable enough to work remotely, so the five of us continued working from the office and just locked ourselves in,’ she says, adding that other brokers have found that working from home has been unproductive.
‘What would normally take five seconds to walk over to someone’s office and say, “what do you reckon about this?” requires scheduling a call and turns into a half-hour job.’
Karen Hardy / Acme Insurance Brokers
Hardy also believes that workplace injury claims could potentially become ‘a can of worms’ with claimants misrepresenting the circumstances of an injury. She also worries about confidential client data being exposed.
‘Cyber attacks could become an issue if other family members are using a work device as a play tool,’ she says. ‘Employment contracts will need to be adapted to address cybersecurity and privacy issues. I certainly would not like to see my staff tapping into the free wi-fi at their local cafe — that is just asking for trouble.’
Insurance leader at PwC in Singapore, Shea Leen Woo, agrees. ‘There will be an increase in cyber risk with most employees working from home,’ she says. ‘In addition to cyber risks, there are also data privacy concerns — not only with the systems and devices used by the employees, but potentially housemates may also gain access to confidential client or company information.’
Shea Leen Woo / PwC
Although Hardy emphasises to clients that the risk of cyber attacks is heightened while working from home, she says most are complacent. ‘Out of 5,000 clients, only five will take out a cybercrime policy. They say, “Oh it’ll never happen to me — that only happens to city folk with servers”.’
Similarly, she believes that the prospect of clients visiting employees at home is fraught with danger and would require employees to take out public liability insurance.
‘How many people do you know living in a dinky old house?’ she says. ‘If you actually had to adhere to workplace health and safety legislation, you’d have yellow paint and warnings all over it.’
Hardy believes there will be increasing demand for room hire on an hourly rate for meetings, or employees will schedule meetings for days they attend the office, which is precisely what Steadfast will be doing as it embraces the ‘new normal’ in 2021 and beyond.
SPACE AND SECURITY A CHALLENGE IN HONG KONG
While many employees in Australia relished being able to work from home, the sentiment wasn’t as strong in Hong Kong, says Erik Bleekrode, head of insurance KPMG China and Asia Pacific.
‘In Hong Kong and other large Asian cities, people tend to live in small apartments with families. While working from home is a practical alternative, it may not necessarily be a very pleasant one,’ he says.
Nonetheless, Bleekrode expects that more people in the region will work from home and that it will be increasingly acceptable to do so — but that it will be done on a smaller scale than in some Western countries.
Hong Kong never had the 1.5 metre rule for social distancing and restaurants and cafes remained open (although face masks have been widely used since the pandemic first broke out). This meant that many ended up working from cafes like Starbucks because they had better wi-fi.
JESSICA MUDDITT / Freelance business journalist
