When COVID is Contracted in the Workplace: the Impact on Workers’ Compensation

Employers and carriers alike are preparing for an onslaught of lawsuits and claims relating to failures to meet health and safety obligations for employees who contract COVID-19 in the workplace, or over the course of carrying out their duties.

Is COVID-19 a compensable workplace injury?

With legislation varying by state and contract conditions, by and large employees are likely to be covered by workers’ compensation if:

  • They contracted the virus in their line of work; and
  • They were employed prior to their illness.

However, with work taking only a fraction of the day, it can be difficult for employees to prove the source of their infection. And in many cases, exposure to risk isn’t grounds for a claim – but the resulting damage can be. Already, lawsuits for COVID cases allegedly contracted in the workplace are making headlines in a number of states.

What does that mean for our industry?

While there have been exciting developments in vaccines, tangible benefits are unlikely to materialize for many months. The industry is experiencing a trend toward paying out claims for workplace-contracted COVID to avoid the risk of those cases becoming litigated. For carriers, this is an understandable but potentially expensive approach.

So then, at what point are employers liable, and how can a business be sure they’re meeting their responsibilities for keeping employees safe? In some states, legislation has been altered to allow broader conditions for COVID-related concerns. Provided employers have met their obligations to create a safe workplace, such as appropriate distancing and other hygiene measures, these adjustments to include COVID-19 as a workplace injury may serve to protect some businesses from liability. But it’s important to note that the responsibility still sits with the employer.

What can be done?

Proactive measures to support insureds may pay dividends for carriers in both reduction in claims, and an increase in good will. Now may be the time to produce resources to help policy holders understand their responsibilities and obligations, and to outline measures they can take to protect their business from liability – and keep their people safe.

For example, invite employers to consider what they’re doing to manage working arrangements and workloads, and if they are resourced appropriately to support virtual collaboration. Importantly, now would be the time for preparation of crisis management plans to map a clear and considered course of action to guide a response where an employee contracts the virus. Doing so demonstrates diligence towards meeting their duty of care for protecting employees and provides clear guidance for implementation at all levels of the business (especially key for geographically diverse workplaces).

As an industry, we’re well positioned to respond to major loss events – but the sheer scale of COVID-19 is delivering far-reaching consequences, and with coronavirus cases still climbing, we’re almost certain to face a challenging road ahead. But with preparation, and advance planning on a course of action before issues erupt, both carriers and their policy holders can weather these testing times.

Michael Hessling

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