As of March 10, 2020, the COVID-19, also known as the coronavirus, has been declared a pandemic by the World Health Organization. Not only has the virus devastated thousands of lives, it has also affected economies worldwide.
D&O Cases
With the spread of the coronavirus, businesses should prepare themselves for the likelihood of an increase in shareholder suits. The success of these suits is dependent on the businesses preparedness to disclose D&O liability risk. D&O is not the only suit to be aware of, as there may be an increase in other kinds of claims, such as workers’ compensation exposure, employment practices liability, and business interruption insurance.
There is a possibility of an increase of D&O cases, and while past widespread illnesses haven’t typically led to litigation, now it is more event driven. Coronavirus is unique because of how severely it is affecting businesses.
Workers’ Compensation
Workers’ compensation generally covers occupational diseases and injuries that are specific to the trade of the worker. Generally, workers’ compensation does not cover a disease that the public is exposed to. However, coronavirus is different if the worker can establish a direct link between the workplace, and how the disease was caught.
OSHA Standards and Liability
OSHA, or the Occupational Safety and Health Administration has declared that COVID-19 is a recordable illness, meaning that any case of COVID-19 must be reported to OSHA. It is strongly recommended to have an infectious disease and response plan as well as policies in place to identify ill employees. If an employee gets sick, they may have grounds to file for workers’ compensation if they can argue a direct link to the workplace.
Business Interruption Insurance
Business Interruption Insurance would generally not cover policyholders for COVID-19 because a covered loss requires physical damage to a covered property. Even so, it is important to read the wording of your specific insurance policy to ensure what triggers coverage. Contact your insurance broker to help settle any confusion about your policy.
Having business interruption insurance could help with supply chain issues associated with COVID-19, but it is important to realize there are some limitations to this type of coverage. It is important to go over your policy to ensure that your suppliers are in it.
How is your business addressing the risks associated with COVID-19? Talking to your insurance broker to make sure your insurance policies provide sufficient coverage for your business is vital. If you have any questions on your current policy feel free to reach out to info@libertycompany.com.