Three misconceptions about hybrid working and IT equipment coverage

Hybrid working has revolutionised the way we work, but it may also be a catalyst for new potential risk exposures over the longer term. As employees divide their time between home and the office, businesses face new challenges in managing their computer insurance cover to mitigate the risks and costs associated with modern working trends.

Recent research by HSB highlights some employee confusion as to whether businesses are adequately covered. In a survey of employed and self-employed UK workers, 54% stated their business insurance policy covers work computer equipment used at home. In contrast, 13% said that it doesn’t, while one third of respondents admitted they were unsure. 

Our blog considers three misconceptions about computer insurance in relation to hybrid working, and how brokers can help their clients to ensure appropriate coverage is in place.

With hybrid working seemingly here to stay, businesses need to reassess whether their existing insurance policy protects their computer equipment. Whereas previously a property insurance policy may have provided the level of cover needed, changes made to working patterns or locations could now require a different level of (or specific) computer policy. 

Businesses who elected to reduce their coverage when embracing hybrid working during the pandemic should review their policies again. Similarly, growing businesses who have invested in new technology and equipment should check their policy limits in case they are no longer reflective of their insurance requirements today.

Businesses transitioning to hybrid working could have potential gaps in their existing policies due to changing exposures in coverage from employees working from home. HSB’s research reveals that 46% have lost or damaged IT work equipment, with over half (54%) of these incidents occurring whilst commuting. 

Some insurance policies restrict cover to business premises, meaning that laptops, smartphones and other portable equipment used away from on-site premises may not be covered. In addition, some policies generally exclude data recovery costs and may only provide limited cover for computer hardware and equipment breakdowns.

Global supply chain issues can directly impact a business’s ability to access replacement computer equipment in the event of it being lost or damaged. Fluctuating computer chip shortages in recent years has made computer equipment a more valuable asset, coinciding with increased costs for upgrading IT infrastructure, such as hardware and software. 

With the value of IT equipment having risen sharply over the past two years, some businesses could be underinsured if the sum on their policy doesn’t cover the cost of replacing or repairing computer-related assets.