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July 20, 2020

9 Mitigation Strategies for COVID-19-Related Employment Liability Claims

graphic of office during COVID

While there are a number of employment liability claims that may arise as a result of COVID-19, even if they are not warranted, claims for wrongful employment practices can disrupt operations, damage your business’ reputation, hurt employee morale and negatively impact your bottom line. Thankfully there are steps you can take to protect your company from an employment practices liability claim.

1. Implement a Return-to-Work Plan

An effective return-to-work program ensures quality medical care, contains workers’ compensation costs and returns injured workers to gainful employment more quickly. To best combat potential COVID-19 claims, make sure that your program incorporates federal and local safety guidance (e.g., CDC, OSHA, state health authorities) on personal protective equipment, workspace hygiene, social distancing measures and others.

2. Practice Equality

From the moment you start the pre-hiring process until the exit interview, you are vulnerable to an employment-related lawsuit. Making sure that your policies and procedures are implemented in a fair and equal manner is crucial to mitigating a potential claim.

3. Consult with Legal Counsel

When implementing (or updating) policies and procedures, consult with legal counsel to ensure compliance. Counsel should also be present when undergoing recall, rehire and job offers, as this stage is the epicenter for multiple employment-related claims.

4. Educate and Train Employees

Managers and supervisors should be trained on any new policies and procedures drafted in the wake of COVID-19. Ensure proper communication to all employees, particularly line managers who will be responsible for implementation.

5. Comply with Privacy Regulations

How you handle medical-related information is critical to avoid claims for improper handling of sensitive personal health information (PHI). Not only is this an EPL risk (violation of employee privacy) but it can also be a data-breach risk if not properly secured. Maintain the confidentiality of all medical-related information provided by employees by complying with federal and state guidance.

6. Monitor COVID-19 Guidance

The continued spread of COVID-19 has resulted in increased regulatory guidance that is continually updated. Businesses should regularly monitor new federal, state and local guidance, as well as legislative enactments for potential impacts requiring a change in business practices.

7. Review Insurance Policies

We’ve already seen COVID-19-related lawsuits filed against employers. As more businesses reopen without a coronavirus vaccine, claims under Employment Practices Liability Insurance (EPLI) policies will likely continue. Take time to review your policy to understand what your coverage, terms and limits are. You should also review your cyber liability policy for data-breach protection.

8. Prepare for Insurance Policy Renewal

Be prepared to answer specific questions about your employment practices when applying for or renewing insurance coverage, especially as it relates to actions in response to COVID-19. Common questions that may be asked include:

  • Has the organization been ordered to shut down or substantially scale back operations due to a government mandate?

  • Has the organization experienced layoffs impacting 20% or more of their total employees in the past or is that anticipated in the coming year?

  • If a partial layoff or reduction, has the organization conducted an analysis with legal counsel to determine the impact the reduction in workforce will have on members of any protected class?

9. Update Your Risk Management Program

A strong approach to risk management is a key element in protecting your business from new and emerging exposures, such as COVID-19. In addition to updating your risk management plan, you should also take advantage of your insurer’s risk management programs as a mean of reducing the likelihood and severity of EPLI claims. Many programs include employment law counsel hotlines and sample employee handbook policies and procedures, and provide timely regulatory updates.

In addition to consulting with your legal counsel, you should contact your local insurance and risk management professional or a member of our team for more risk management guidance.

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