How evolving working trends are impacting computer-related risks

HSB commissioned a survey of employed or self-employed workers to understand the opportunities and challenges arising from modern day working practices in relation to computer insurance.

Our research has formed the basis for this research report, ‘How evolving working trends are impacting computer-related risks’. Within it, we examine the growth of hybrid work in the UK, its risks and benefits for employees and organisations, and its implications for UK businesses and the insurance sector. We explore the diverse preferences of employers implementing hybrid work policies, the impact on commuting patterns and technology usage, and the potential business continuity risks related to the UK’s increasing reliance on imported computing hardware.

Our research findings also suggest some misconceptions about computer insurance cover which could leave some businesses exposed, and underline the crucial role that brokers can play in supporting their clients in the new hybrid working landscape.

The seismic shift towards hybrid working has revolutionised the way we think about offices and remote working. Research by Slack revealed that an overwhelming 98% of business leaders were rethinking their physical office usage and investing in hybrid work technology based on fewer employees coming into the office during the pandemic¹. In contrast, amid continued economic instability, 2023 has seen a minority of companies attempt to backtrack on flexible working patterns and mandating more office in-person days².

What is clear though is that the era of the five days-a-week, nine-to-five office schedule is over. There is no longer a ‘one-size-fits-all’ solution which will dictate a ‘standard’ way of working due to the diverse preferences of employers implementing hybrid working policies.

Prior to the Covid-19 pandemic, the appeal of remote and hybrid working was gradually on the rise. In 2019, 12% of the UK workforce worked from home at least one day per week, with the most popular remote working areas being London, the South East, and South West England³. The introduction of national lockdown measures and other social distancing restrictions from late March 2020 saw remote work adoption peak in June 2020, which led to 38% of the UK’s 33 million workforce at this time reverting to being predominantly home-based (up from 5% in 2019)⁴.  

Having become accustomed to the greater flexibility of working from home, many employees appear reluctant to return to their previous office routines following the lifting of all Covid-19 restrictions in February 2022 - either because of safety or financial concerns, or an unwillingness to sacrifice the increased flexibility and convenience they’ve become accustomed to enjoying in remote settings.

Undisputedly, hybrid working is here to stay. Whilst the initial focus has been on transitioning IT equipment and employees, many businesses may have not considered the potential risks and impact on computer equipment over the longer term.

Our research findings suggest that UK businesses need to consider how they manage their computer insurance risks to minimise the challenges and costs associated with damaged and lost equipment.

HSB's survey revealed that 46% experienced lost (14%) or damaged (32%) computer equipment, with laptops and mobiles accounting for 60% of these incidents; with typical causes including theft, physical damage from trips or falls, drinks spillages, and wear and tear.

Whilst a large proportion (63%) sought professional help for repairs, 17% opted to repair it themselves or asked a friend for help. Surprisingly, 10% of respondents didn't report the loss or damage to their employer, which may suggest they feared being reprimanded or believed they could fix the issue themselves.

A global shortage of semiconductor chips – a critical component in most computer equipment products – has led to shortages of computer hardware. The Covid-19 pandemic, and the transition to hybrid working practices, was the primary factor for the computer chip shortage. The knock-on effect of more people working from home meant that sheer demand for technology skyrocketed.

The UK increasingly relies on importing computer and laptops. According to the Observatory of Economic Complexity, in 2021 the UK was the sixth largest importer of computers in the world⁵. Furthermore, between January 2022 and 2023, UK imports of computers increased by £281m (35%) from £791m to £1.07bn, with the majority of imported equipment coming from the Netherlands, Germany and Hong Kong.

For businesses hampered by crippling expenses and tighter margins, insurance premiums may seem like an added cost they could do without. There is evidence to suggest that the cost of living crisis has led to some businesses scaling back their insurance cover, or in some instances even cutting it completely.

Statistics published in BIBA’s 2023 Manifesto, 'Managing Risk – Delivering Stability', state that 51% of businesses have stopped buying at least one insurance cover⁶. Before contemplating a similarly risk averse approach, businesses should carefully consider their exposures and the implications of the worst case scenario due to being uninsured.

The pandemic forced many businesses to reinvent their operating models, but the shift towards new working trends poses unique challenges in relation to computer insurance. Whilst the initial focus has been on transitioning equipment and employees, some businesses may not have considered their insurance policies and the potential risk exposures of remote working over the longer term.

Although many businesses have willingly adapted to modern working trends, some have been slower to understand the insurance implications of new working practices to protect against accidental damage, loss and business continuity disruption. Those transitioning to remote working should review their existing policies to identify potential gaps and changing exposures in coverage that should be addressed. For example, property policies normally restrict cover to the business premises. This means that laptops, smartphones and other portable equipment which are used away from on-site premises may not be covered, and a specific computer policy may be required.

As employees increasingly divide their time between working from home and designated offices, the varying demands of the hybrid working environment is placing more pressure on businesses to counterbalance emerging risks. Laptops and portal equipment devices are more essential than ever, but as more employees move to hybrid working, accidental loss incidents and the risk of them misplacing computer equipment during commuting between their home and office could also rise.

By reviewing existing policies, enhancing coverage and seeking specialist advice, now is the time for businesses to take a fresh look at their insurance cover in the new working environment. Here, the role of insurance brokers to support their customers by making sure they have appropriate and adequate cover in place for their computer equipment cannot be understated.