The rise of pandemic-related employment practices liability insurance claims

 

Daisy Cosme
Director of Commercial Insurance
dcosme@valley.com

 

 

Employment Practices Liability Insurance (EPLI) protects businesses from different kinds of employee lawsuits alleging a wrongful employment-related act or practice – such as wrongful termination, discrimination, negligence, privacy violations, and more. But as the COVID-19 virus continues to surge around the country, many employers are starting to see a new breed of lawsuit emerge pertaining to their actions (or inactions) during the pandemic.

   

The crisis has spurred a slew of new lawsuits, raising questions and concerns at companies of all sizes. Will your EPLI policy cover your business in the event of a COVID-related claim? The answer is dependent on your policy’s specific provisions and the facts surrounding the specific claim.

   

You should review your current EPLI policy closely to assess your existing coverage, talk to your insurance and legal advisors, and come up with a plan to address possible scenarios. Let’s consider some examples of the different kinds of claims that may arise from the pandemic.

   

An employee (or group of employees) may allege that:

• They contracted COVID-19 at your workplace due to inadequate policies and procedures.

• Their employer failed to provide the necessary PPE to protect them, increasing their risk of contracting the virus.

• Their employer disclosed that they were positive for COVID-19 in an effort to do contact tracing, thus violating their ADA privacy protections.

• Their employer retaliated against them by discharging them for refusing to comply with the employer’s COVID-19 safety policies.

• Their employer misrepresented the severity of COVID-19 risks in specific environments or failed to take reasonable steps to clean, disinfect, or otherwise prevent spread.

• Their employer forced them to return to the workplace when the risk was still high or too many employees were being asked to work in close quarters at the same time.

• Their employer, who was forced to terminate or furlough workers due to the economic downturn, discriminated against a selected class of workers (such as older employees) when doing so.

   

Again, some of these scenarios may be covered by your policy, but others may not be. Many EPLI policies include language that exclude “bodily injury, sickness, or disease” since those claims may be covered under a workman’s comp program. Again, it’s important to review your specific policy.

  

According to Independent Agent Magazine, “As more companies open their doors and encourage employees to return to work, the risk for lawsuits against an employer is considerable.”

   

A standard EPLI policy will reimburse your company for the legal costs of defending against an employee lawsuit (whether you win or lose), and will pay judgements and settlements, but typically not punitive damages or civil or criminal fines.

   

If you’re concerned about your business’ liability during the pandemic, we should talk.