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What Are the Legal Implications of Remote Work?


Over the past year and a half, the majority of accounting firms have switched from having a physical office to allowing employees to work from home, and many staff members want it to stay that way. While remote work offers many advantages, there are legal liabilities associated with home-based practices to consider. Legal expert Eric J. Parker explains. 

Aug 4th 2021
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Like so many professionals, accountants are rethinking how to conduct business in the wake of the pandemic. For many, after a few months of adjustment, business continued as usual during the crisis, with little or no change to the typical workday. Yet, for others, the pandemic period has become one of reinvention, with a significant number of professionals, such as lawyers and financial planners, rethinking what it means to “go to work.” Among the most significant changes is the decision to not renew commercial office leases and to convert operations from an office environment to a home-based setting. The decision to switch from a commercial setting to working from home can be complicated, and adding to that complexity are the myriad legal issues that must be carefully considered before making such a change.

Besides the obvious differences that typically distinguish a traditional, office-based practice from a home-based practice (including a well-stocked fridge and pre-shower meetings via Zoom), there are a broad range of qualitative differences that warrant professional consultation, if not prompt changes, to better protect the home-based practitioner from a variety of legal liabilities. These potential liabilities include some obvious and some less obvious considerations. Among the more obvious considerations are updating your workers’ compensation and your general liability insurance policies to address potential liabilities associated with conducting client meetings from a home office. Some less obvious issues may include assessing the risks associated with employees using personal motor vehicles to conduct business or considering the possibility that your beloved Goldendoodle may take a bite out of your most valued client during a meeting at your home. Believe it or not, such incidents occur with sufficient frequency that it makes sense to explore the risks and adopt measures to reduce liability and insure against them. 

In nearly every state, business owners who employ either full-time or part-time staff are legally required to obtain workers’ compensation insurance coverage to protect workers who may become injured in the course of their employment. Workers’ compensation claims differ from traditional negligence or “tort” claims in that the injured employee need not prove fault on the part of their employer to receive compensation. The question is simply whether the employee suffered an injury while performing their usual or reasonably foreseeable work-related duties. While most accountants and other business owners are aware of the need to secure workers’ compensation coverage, what may be less obvious is the variety of injuries that can result in a home-based setting and, more significantly, the potential for increased risk of “third-party” tort claims resulting from the same injury.

A third-party claim is one that is asserted against a party other than an employer for injuries sustained by a worker in the course of their employment. A classic example of a situation that might result in a third-party claim would be a car accident in which an employee, while driving on work-related business, was struck by a vehicle operated by an intoxicated driver. In that case, the employee would be legally entitled to pursue a claim for workers’ compensation benefits (typically including a portion of the employee’s lost wages and the payment of all incident-related medical bills), and the employee would also have the right to pursue a tort claim (or personal injury claim) in the form of a third-party claim against the driver who caused the accident. In this instance, the injured party is the “first party,” the employer is the “second party,” and the intoxicated driver is the “third party” who remains liable for civil damages to the employee who was driving. 

But what happens when the cause of an employee’s injury is the result of an accident occurring in your home, such as a slip and fall in your kitchen caused by an unattended coffee spill? While the exclusivity provision of most workers’ compensation laws would prevent the injured employee from pursuing a tort action against the business owner or employer, that may not apply if the business owner’s spouse is a co-owner of the home and may have been responsible for the coffee spill. This is where consultation with a highly experienced insurance professional becomes essential. Many homeowners’ policies exclude claims for injuries which arise from work-related circumstances. For this reason, the business professional would be wise to inquire about alternative or supplemental coverage that would fill gaps that may exist between traditional homeowners’ policies, general liability policies and workers’ compensation policies. 


Another common, but often underappreciated, risk applies to injuries caused by an employee or “agent” (one who acts for the benefit of a “principal”) while operating an employer’s car for a work-related errand. Like most homeowners’ policies, many automobile insurance policies exclude claims in which the vehicle is used primarily for business versus personal use. When an employee has personal automobile insurance, but only the minimum coverage, business owners can purchase “non-owned vehicle” liability coverage to protect the business and the practitioner from an otherwise underinsured claim, which could result in a vicarious liability claim against the business.  

The risks of operating home-based businesses, and particularly those that bring clients and others into the home, are categorically distinct from the risks of operating in a commercial setting. Building code requirements and conditions mandated by the Occupational Safety and Health Administration can lead to dramatic differences between the risk index for home offices and commercial offices. For example, a spiral stairway between two floors may be permissible in a home-based setting but prohibited in commercial or retail settings due to the higher incidence of falls associated with such stairways. 

The bottom line is clear: switching from a commercial office practice to a home-based one involves different kinds of risks and requires appropriate coverage to protect yourself and your family from uninsured civil liability. Before making such a change, consult with an attorney who has expertise in tort litigation in addition to an experienced insurance professional to identify and eliminate or substantially reduce exposure.