Can Liability Insurance Protect Employers from COVID Lawsuits?

AdobeStock_185592300-300x200Business owners have been confronted with a host of costly legal issues as a result of the COVID-19 pandemic. For those with employees, the risk of COVID lawsuits has been a serious concern from the earliest days of the pandemic. Most employers assume that any COVID lawsuits will be covered by their liability insurance. Unfortunately, this has not always been the case.

Workers Comp Lawsuits V. Personal Injury Lawsuits

First, it is important for employers to understand the difference between workers’ compensation coverage and liability coverage. Workers’ compensation coverage pays for any injury that employees sustain in the scope and course of their employment. The employee does not have to prove negligence – so long as the injury occurred on the job, it will be covered. If an employee believes they can prove that the employer was negligent, they can file a personal injury lawsuit against their employer. These lawsuits are not covered by workers’ compensation coverage. An employer must maintain a separate general liability policy to cover claims of this nature.

How Liability Insurance and Workers’ Comp Have Been Applied to COVID Cases

The Coronavirus pandemic plunged the insurance industry into chaos. Suddenly, insurers were faced with legal questions that had no clear answer. Some policyholders were surprised to learn their business interruption insurance claims had been denied. Those and other cases have landed in court to determine whether the insurance policies apply to COVID. In the case of general liability insurance, an employee who caught COVID would have to prove that (a) the exposure occurred in the workplace and (b) the workplace exposure was caused by the employer’s negligence. These are difficult to prove in the ever-changing state of our scientific understanding of the Coronavirus.

Workers’ compensation claims are a little trickier for employers. The employee does not have to prove any negligence. So long as the COVID exposure occurred within the scope and course of employment, the employee is entitled to workers’ compensation. The federal government actually made it easier for federal employees to access workers’ comp by creating a presumption that exposure occurred on the job for certain federal workers. Private employers are not bound by these rules, but similar presumptions may apply in your industry. Your insurance carrier might also have adopted emergency COVID rules in order to handle the influx of claims.

What Employers Can Do to Mitigate the Risk of COVID Liability

There are very few clever answers when it comes to COVID. Researchers are learning more every day, and the law is struggling to keep up. The best advice for employers is to take all reasonable precautions. Follow CDC guidance for masking, social distancing, handwashing and other spread prevention techniques. Be sure that your workplace complies with all local health ordinances. Ensure that your employees have the tools they need (like hand sanitizer and face masks) to stop the spread of COVID in your workplace.

Contact Us Today to Speak with a Los Angeles Business Lawyer

The experienced Los Angeles business lawyers at Structure Law Group know how to resolve liability issues against all employers. Call (310) 818-7500 to schedule a consultation or contact us online.