Modernising the Workplace

Consumer supply chains: drones are go

Drone package delivery is set to be a major success story of 2021. It is perhaps one of the few industries to have been given a boost by the COVID-19 pandemic. In the current world of quarantine, lockdowns and restrictions on movement from the home, the time is ripe for drones to adopt a strong presence in the home delivery market. There is always a flip-side of course and the shift to drone delivery will serve further to erode the traditional high street. From an aviation insurance perspective, higher levels of drone traffic in our skies dials up heightened potential for accidents and incidents and associated insurance liability claims. We have already seen the potential that a misuse of drones has for interference in airport operations: in December 2018 Gatwick airport suffered a 30 hour shutdown following drone sightings close to the runway, impacting on around 140,000 passengers and over 1000 flights. The Gatwick incident remains unresolved. A similar event in the future, which cannot be ruled out, would likely have a sideways impact upon the wider drone industry in terms of a temporary shutdown of drone operations, at short notice, and in the mid-term, changes to regulation.

The physical and mental impact of homeworking will generate claims

Employers face the challenge of reducing the risk of homeworkers developing physical and mental ill-effects of working from home.  Homeworkers may feel isolated, anxious, have a lack of perspective, worry about reductions in hours, possible redundancy or fear of contracting COVID-19. Physically, there may be issues with their workstations and taking regular breaks.  This could all result in claims for damages as a result of musculoskeletal disorders and stress. There is also potential for more incidents to occur where there are more people at home for longer; more ‘visitors’ through deliveries; more pets bought and more DIY projects leading to the inevitable risk of injuries to occupiers, visitors, contractors and the public.

Recession will lead to poorer workplace safety and increased claims fraud

A global recession will inevitably lead to more cost-cutting, insolvencies and greater business uncertainty. We predict that in some industries this will mean reduced investment in plant and training, resulting in some employees being asked to fulfil roles for which they do not have the requisite competence or equipment. This will in turn lead to an increased risk of workplace incidents and a subsequent rise in claims and HSE enforcement action. Casualty claims fraud is also expected to rise.  The correlation between casualty claims fraud and recession is well documented. Exaggerated and fabricated claims in particular will rise as a result of the increased proportion of people motivated by financial hardship.  Claimants will take advantage of the lockdown measures and data tells us claimant solicitors’ behaviour is already changing in response. 

A UK and US perspective: with the balance of any workforce now ‘remote’, increasing demands for remote accessibility and reliance on cloud service providers will trip up those companies that do not adapt cyber security to the new normal

While businesses have been quick to adapt to remote working in the wake of the COVID-19 pandemic, not all IT departments have had the chance to secure business-critical systems for the new reality of the virtual workplace. The majority of modern day cyber threats exploit vulnerabilities in the Remote Desktop protocols and servers supporting the running of office communication software. Such previously unknown, so-called ‘zero day’ vulnerabilities are discovered on a daily basis by cyber criminals and it is imperative for all information security professionals to review patching and security measures surrounding newly activated remote access. In the US, growing reliance on cloud service providers under COVID-19 is making it more difficult to determine whether an occurrence is an insurable failure of the insured’s computer system or an uninsurable infrastructure failure. Unless the insurance market begins to adjust to this new reality, carriers may find themselves on the wrong end of future US court judgments.

Companies need to embrace diversity and inclusion

Boardrooms can no longer dance around diversity and inclusion issues; they must embrace change because their investors and customers demand it.  COVID-19 and the Black Lives Matters movement have brought into sharp focus the need for, and benefits of, diversity and inclusion and they present a real opportunity for change.  A University of Toronto study recently found diverse boards are ‘less prone to financial restatements and fraud’. This is an opportunity for boards to reimagine their structure, diversify their composition and draw on the talent of those who may otherwise have been excluded from executive positions.  Companies that fail to embrace change now risk potential claims, as already seen in the US, and more immediately, reputational damage and shareholder ire.  

A US perspective: the number of claims against directors and officers relating to diversity will not match #MeToo claims

In 2020, shareholder actions were filed against directors and officers alleging a lack of diversity.  The allegations focused on the board failing to uphold their fiduciary duties with respect to diversity despite corporate policies promoting them.  There are similarities here to #MeToo claims.  The #MeToo complaints allege that directors and officers breached their fiduciary duties by creating a hostile work environment and were unjustly enriched by collecting significant remuneration despite alleged wrongdoing.  While complaints based on lack of diversity may increase, they are unlikely to come close to the number of #MeToo claims.

Will COVID-19 speed up the change to virtual healthcare?

It is possible that we will not go back to the same way of delivering healthcare.  Virtual healthcare, or virtual appointments, has inevitably been increasingly used during the pandemic.  Notwithstanding the elimination of transmission, it is easy to see why:  it should be quick and efficient for patient and provider alike (certainly for routine patients or issues).  However, this modernised manner of healthcare provision may not be suitable for multi-faceted conditions, and cannot change the way some care or treatment must be delivered (eg surgery).  In addition, the way in which virtual consultations take place may result in mis-diagnoses, or ‘soft’ issues being missed in the way that they may not have been in person. 

Solicitors: supervision is key to survival for solicitors as lockdown continues

The pandemic has had a marked effect on the way solicitors work and will continue to do so. Solicitors have shown they can work at home but, to succeed, firms will have to ensure they find effective ways to supervise, motivate and mentor staff.  Well-being issues need to be considered with strategies in place to identify issues and provide support.  Firms must also address the inevitable risk that isolation could threaten existing supervisory structures and that with the erosion of such systems comes exposure to claims and regulatory action.  Both have a financial and reputational impact and, with the introduction of the SRA Standards and Regulations in November 2019, firms will need to ensure they are taking their supervisory obligations (in their widest sense) very seriously.

Technology professionals: 2021 will see more claims and contractual disputes for IT professionals

Technology is firmly in the spotlight as COVID-19 has increased pressure on IT systems to support homeworking and other forms of remote interaction. Dissatisfied customers may seek to threaten or pursue claims in negligence or breach of contract if their IT systems are not operating to their satisfaction. Equally, economic challenges and significant changes to operating conditions (including COVID-19 and Brexit) are likely to lead some companies which have already engaged IT professionals to reduce or delay IT project spend, resulting in an increased frequency of contractual disputes on on-going technology projects. 

Future cities – this need not be the death of the office

The future of our cities hangs in the balance as we try and square competing demands of containing the spread of COVID-19 with allowing the economy to flourish.  Working from home has meant an exodus from cities that then suffer from plummeting footfall and a drop in the need of the services that relied on the office traffic.  What is needed now is a rethink about our future city workspace.  It needs to be flexible, responsive and energy conscious, facilitated by new technology - PropTech - which can deliver greater efficiency and greater productivity. We also need better cycling and walking transport routes and green spaces.  The appeal of the city is cyclical and we need innovation to draw businesses and people back with the offer of true face-to-face contact and camaraderie. We expect to see less of a production line and more of a laboratory for new ideas. Developers, landlords and businesses need to build on this opportunity and insurers need to support them.

Shift for mainstream home insurance to cover increased home working

2020 saw a rise in homeworking.  Regular homeworking is likely to become the new norm.  Staff embracing the flexibility of homeworking has advantages but it may affect home insurance cover. In March 2020 and latterly in October, the Association of British Insurers confirmed that “if you are an office-based worker and need to work from home because of government advice…, your home insurance cover will not be affected.”  Nevertheless, when policies come up for renewal, home-working staff would be wise to make sure their insurers are aware and check the small print.