Employers have big decisions to make when it comes to the risk of not doing business versus the risk of employees spreading COVID-19 while California covid cases are growing and there’s no covid vaccine (look at the covid Sturgis debacle to see what can go wrong). The risk of coronavirus related claims is rising as more employees return to the workplace and while most suits are filed against large corporations, no company is immune. Here’s what to know about employment practices liability insurance and some potential COVID-19 related situations where it can reduce your exposure.
What Is EPLI Coverage?
Employment practices liability insurance (EPLI) covers businesses against claims by workers that their legal rights have been violated. Employers with returning workers should evaluate their coverage under EPLI policies and how they can respond to corona virus-related claims. EPLI provides protection against employee lawsuits that include claims of:
- Sexual harassment
- Discrimination
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
- Defamation
- Privacy rights violation
- Failure to adopt or implement policies and procedures
The best way to reduce or prevent employee lawsuits is to educate managers and employees. Some ways to do that include:
- Creating effective hiring and screening programs
- Posting corporate policies around the workplace and in employee handbooks
- Making sure everyone knows what behaviors are not permissible
- Showing what to do if employees are the object of sexual harassment/discrimination
- Documenting occurrences and the steps being taken to prevent/solve disputes
- Advising employees to get a covid 19 test or visit a testing center (covid testing can reduce covid deaths since not all infected people display covid symptoms)
Some insurers provide coverage as an endorsement to business owners’ policies (BOPs) while other companies offer EPLI as a stand-alone policy. The cost of EPLI depends on your type of business, the number of employees, and risk factors such as if you’ve been sued over employment practices before. Policies will reimburse for the costs of defending a lawsuit in court and for judgments/settlements, whether you win or lose the suit. Policies usually don’t pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as worker’s compensation are excluded from EPLI policies. Whether an employer can recover EPLI in response to a claim (including those related to the corona virus) will depend on the terms of the policy, the allegations, and the damages claimed. Employers should also be aware of EPLI claim reporting requirements to avoid technical notice defenses an insurer might raise.
How Can It Help With COVID-19?
Covid 19 cases are increasing and employees returning to workplaces may cause an increase in EPLI claims related to COVID-19. Potential claims which EPLI policies could cover include:
- A returning employee claims they contracted COVID-19 at work due to inadequate workplace policies and practices.
- An employee alleges that an employer failed to provide legally required protective equipment and/or retrofit the workplace, resulting in an enhanced risk of exposure to COVID-19.
- An employee claims their employer disclosed that they were positive for COVID-19 in connection with the employer’s contact-tracing efforts, violating ADA privacy protections.
- An employee alleges retaliation after being discharged for refusing to comply with the employer’s COVID-19 policies.
- A group of employees alleges that the employer misrepresented the severity of health risks in the workplace or failed to take reasonable steps to improve conditions through cleaning and disinfecting.
- An employee claims psychological injury and non-economic damages due to the employer’s call for a return to the workplace during COVID-19 or permitting too many employees to work closely together (absent social distancing guidelines).
- An employer forced to terminate a significant number of employees because of the COVID-19 economic downturn receives a Worker Adjustment and Retraining Notification (“WARN”) Act claim for unpaid wages and compensation.
- An employer forced to terminate or furlough a significant number of workers is alleged to have discriminated against a protected class, such as older workers.
- An employee claims the employer failed to provide paid leave as required by the Families First Coronavirus Response Act.
Even with appropriate safeguards and protections and covid testing centers, COVID-19 presents challenges to employers and employees returning to the workplace. Employers need to assess their COVID-19 risks and potential exposures to claims, including a careful examination of their current EPLI policy.
If you’re a business that’s starting to call employees back in and you’re concerned about your exposure to COVID-19 related liability risks, get in touch with us so that we can talk about how the right insurance can help.