Marsh Outlines COVID-19 BI and EPLI Considerations: Here’s What You Need to Know

Marsh explored COVID-19 liability by hosting a webinar on business interruption and employment law considerations.
By: | March 27, 2020

When unexpected events such as earthquakes or tornadoes happen, the storm has usually passed by the time employers start to worry about their employees.

For natural catastrophes such as hurricanes or wildfire, there is usually a warning, time to prepare, and then a period of waiting to see if traditional property damage or business interruption policies will pay out.

But as the world battles the novel coronavirus, businesses are experiencing a different kind of interruption; one with no short-term end in sight. 

Employers are grappling with losses and trying to figure out where their policies will pay out while also doing everything they can to protect employees and themselves. 

On Wednesday, March 25, Marsh’s webinar “COVID-19: Business Interruption and Employment Law Considerations” touched on everything from identifying covered losses, screening employees for the virus and protecting businesses from liability.

Read Between the Lines of Coverage 

In the event that organizations must close temporarily, companies purchase business interruption policies within their property insurance coverage, but it’s likely those coverages exclude pandemics.

According to the webinar, coverage for interruption by civil authority, such as government shut downs, vary by insurer, so businesses must first determine where their policies pay out. 

“It’s extremely important to do a deep-dive analysis of the entire policy definitions, every endorsement, so that we are prepared to have meaningful discussions with insurers on these issues,” said panelist Robert O’Brien, managing director of property claims, Marsh. 

“It’s really going to depend on specifically what orders are issued, what findings or bills the government may come out with. It can vary, certainly state by state, but also very critically, it’s going to depend on the specific policy language in your policies and the facts of the individual claim. And insurers certainly are going to provide their interpretation of it.”

Considering this, insureds must make sure their claim is supported by keeping hard copies of all documentation, including links to government regulations and orders, and file in a timely fashion. 

Protecting Employees in — and from — the Office

For the few businesses that continue to keep their doors open, employers have an obligation to operate within the guidelines set by the Center for Disease Control and screen for employees who are possibly infected with COVID-19. 

“Based on the current guidance from the Equal Employment Opportunity Commission and the CDC during this pandemic, if an employee appears to be sick or called in sick, employers are allowed to ask certain screening questions to determine whether the employee may be infected with COVID-19,” said panelist Marina Tsatalis, partner, Employment and Trade Secret Litigation, Wilson Sonsini. 

If an employee expresses symptoms, employers have not only the right but obligation to instruct the employee to work from home and self-isolate. It is then up to the health care worker who administers a test to report any confirmed cases.

“With the coronavirus, there are very specific guidance which is to direct the employee to leave work immediately and self quarantine,” Tsatalis explained .

“The CDC States that employees who become ill with symptoms of COVID-19 should leave the workplace and that the Americans with Disabilities Act does not interfere with employers following this advice.”

According to the CDC, employees can stop self-isolation under the following circumstances:

If they will not have a test to determine if they are still contagious, they can leave home after the following has happened: 

  1. They have had no fever for at least 72 hours (that is three full days of no fever without the use of medicine that reduces fevers). 
  2. Other symptoms (for example, coughing or shortness of breath) have improved. 
  3. At least 7 days have passed since their symptoms first appeared 

If they will be tested to determine if they are still contagious, they can leave home after the following has happened: 

  1. They no longer have a fever (without the use of medication that reduces fevers). 
  2. Other symptoms have improved. 
  3. They received two negative tests in a row, 24 hours apart.

Keeping Tabs on Risk and Liability Exposure

Financial uncertainty often brings cost-cutting strategies and layoffs. With employees working from home, employers must keep up with their contractual obligations as well as necessary financial reimbursement. 

“it’s important to continue complying with wage and hour laws. If you have nonexempt employees, hourly workers who are telecommuting, you are still, as an employer, subject to the wage and hour laws on break and meal time and most importantly keeping track of the hours they’re working,” said Tsatalis.

“Because at the end of this, you may have a class action from employees who are saying, “We all worked overtime every day, seven days a week.”

Because reimbursement expenses vary from state-to-state, businesses should put a reimbursement policy in place up front so employees know exactly what they are owed and liability does not fall on the employer if they are not paid. 

Other ways to avoid liability include: having a designated person to keep track of new official regulations and orders regarding the virus, keep track of telecommuters’ hours, implement strict employee privacy policies and consult with legal counsel before cost-cutting. 

“I would suggest organizations need to be thinking about quantifying the potential impacts of the pandemic on their business. So that’s looking at the impact on supply chain, operations, their customer base in order to understand what the revenue impacts would be. And thinking about how to start production again,” said James Crask, global resilience advisory lead, Marsh Risk Consulting.

“The decisions that you take today will have a very real impact on the quality and speed of your recovery as a business.” &

Emily Spennato is a former staff writer with Risk & Insurance.

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