This pandemic has certainly altered what a commercial office space looks like. Some large companies such as Facebook and Google are going full remote till summer 2021 but will maintain their office footprint. These companies are large enough to shoulder the overhead of unused office space. But what if your startup can’t? Many tech startups have decided to go full remote until the pandemic lets up. We have received several calls from clients trying to figure out how this will affect their commercial insurance program. This blog outlines a few options and points to consider as a company decides to move to a full remote workforce.
Option 1: You can cancel your business owner policy
- This is a realistic option if you are super early, have minimal business property (i.e., only a small team with laptops) and will no longer occupy your office space.
- Caution: Check your lease documents as well client contracts. Even if you don’t need to meet your commercial lease requirements you may still have client contracts requesting lines of coverage afforded on your Business Owners Policy.
Option 2: Keep your policies in place, but endorse the policy for your new situation:
- This is a good option to helps conserve a little cash. Most policies can be cancelled on a pro-rated basis.
- This is best if you are going full remote but still want to protect your business personal property such as laptops, hardware, and workstations.
- Even if you shrink your footprint or it might be good to endorse this on your policy for some premium savings.
- It is a simple transaction via endorsement.
- Caution: you still need to keep one location on your policy to keep property coverage via a Business Owners Policy. Even if you go full remote, you will need to add more coverage for your equipment and such.
Regardless of your situation, we recommend you keep your business owner policy
- You also have other lines of coverage afforded in your business owner policy that are important.
- You may still want to keep GL.
- You may still need small limits of Employment Practices Liability Insurance.
- Endorsements for property at unscheduled locations can be a huge benefit.
- Newly acquired property can factor in here.
- Hired and Non-Owned auto is an important line of coverage given in most Business Owner Policies.
Be sure to discuss these moves with your real estate broker and attorney first so you don’t wind up in a heap of legal issues once you decide which route to go with your insurance agent to make the necessary changes. We know you have many decisions to make so let us know if you would ever like to discuss these with us.
Lumen Insurance Technologies is a tech-focused commercial insurance agency based in Austin, Texas. Lumen is hyper-focused on providing the technology startup ecosystem with quality commercial insurance coverage (e.g. D&O, E&O, Cyber, etc.) following a funding event and beyond.
Check us out on the web at www.lumeninsure.com to find more blog topics, general info, or to get help with finding coverage. Email us at email@example.com if you would like to suggest a topic for future blogs.