Covering Coronavirus: Risk Considerations

EPIC Risk Advisory Bulletin

Volume 2, Issue 2

In this issue, we take a focused look at:

1. Supply Chain and Business Risks
   • Restoring Travel in 2021
   • Prioritizing Vaccinations for Trucking Workforce
   • Driver Safety Recommendations
2. Insurance Products and Coverage Information
   • Business Interruption Update
   • Presumptive Compensability Update
   • News of Note
3. Human Resources and Employee Benefits
   • Preparing for Cal-OSHA’s Required CPP
   • Coronavirus Vaccine Considerations for Employers
   • DOL Issues Opinion Letters Re. Pay Calculations
   • OSHA Announces Coronavirus-Related Fines
   • OSHA Reporting Deadline is Approaching
   • Insights from Across the Firm

The information presented here is intended to provide a high level overview of critical areas of concern for businesses around coronavirus. Consult your EPIC insurance broker for more in-depth guidance.

Supply Chain & Business Risks

Restoring Travel in 2021

At several weeks into the year, it is clear that 2021 will mark a time of transition rather than a sudden return to pre-pandemic norms. One of those norms that will continue to look different is business travel. While domestic leisure travel is expected to bounce back, international travel and business travel will likely lag. This is typical of what occurred after the 2008-2009 financial crisis, when international business travel took five years to return to normal levels.

Regional and domestic business travel for meetings deemed most effective in-person should resume first, but even then, spending is not expected to exceed half of what was spent in 2019. The U.S. Travel Association says the travel economy has lost $500 billion since the pandemic began. President Biden has said he will work to restore the nation’s confidence that traveling is safe – a critical move if those losses are to be reversed.

Some of the steps President Biden has called for include a larger role for the Department of Transportation in requiring airlines and other transportation companies to provide PPE to workers. Transportation Secretary nominee Pete Buttigieg is expected to go beyond coordinating with other agencies into possibly mandating adherence to CDC guidelines on protecting workforces and travelers from the spread of coronavirus.

President Biden has promised to require masks on all interstate travel. If he fulfills that promise, it could bring uniformity to travel standards, which has been lacking throughout the pandemic. While most airlines currently require masks, a federal mandate standardizing not only mask wearing, but distancing, testing and screening, would create greater consistency and possibly, compliance.

A change in administration alone is unlikely to cause business travel to rebound. Many in the travel industry believe only the widespread distribution and use of a coronavirus vaccine will accomplish this step forward. A move to vaccinate transportation workers early in the distribution process could help restore public confidence in the safety of mass transportation systems as well as air travel.

Immunity passports have been put forth as a means of allowing travelers to resume international travel safely. While the World Health Organization discourages such documents, Hungary and Iceland have already lifted quarantines for travelers who can provide evidence of a positive and negative coronavirus test within six months of travel.

Airlines including JetBlue, United and Virgin Atlantic, are now using CommonPass for international travel, which is an app showing whether users have tested negative for coronavirus. In the live events arena, Ticketmaster has said its post-pandemic fan safety plans include digital health passes capable of verifying whether or not attendees have either received the coronavirus vaccine or tested negative for coronavirus.

The development of a hacker-proof immunity card or passport will certainly raise questions and objections, but could be important in bringing travel back to pre-pandemic levels.

ATA Calls for Prioritizing Vaccination for Trucking Workforce

The American Trucking Association (ATA) has called for coronavirus vaccinations to be prioritized for truckers. With two vaccines now authorized for use in America, the ATA has begun coordinating with state trucking associations to ensure the motor carrier industry has priority access to the vaccines, as supplies become available.

A CDC advisory panel recommended that transportation workers be included in group 1c, following first responders, teachers and other select frontline workers in group 1b for receipt of the vaccines. Since these are recommendations and not requirements, decisions on vaccine access will ultimately be determined individually by each state over the coming weeks and months.

The ATA says it will continue to work closely with state associations to lobby for governors to provide the trucking workforce with priority access so that workers can continue their essential duties safely and efficiently through the end of the pandemic.

Contact EPIC Transportation & Logistics Risk Control for more information.

EPIC Issues Driver Safety Recommendations for Areas of Social Unrest

With the potential for social unrest conditions across America, EPIC has released recommendations for professional drivers facing potentially dangerous situations. Remaining safe is the top priority. Drivers should take proper precautions to protect themselves, cargo and equipment. Key recommendations for drivers operating in areas of social unrest include the following items.

1. Maintain situational awareness at all times; a peaceful protest can transition rapidly into a violent situation.
2. Avoid areas of unrest. If a gathering is encountered, stop the vehicle and do not drive through it.
3. Maintain continuous contact with the dispatcher/safety department and follow company procedures.
4. Plan for road closures. Beware of other forms of roadblocks, as makeshift roadblocks with unauthorized/stolen vehicles may be parked to block a roadway.
5. Immediately report any emergency to local law enforcement by calling 911. If hauling hazmat, be ready to identify the location and tell first responders what is being transported.
6. Park in well-lit, safe areas. If danger or exposure to large gatherings in the form of protest exist, abort delivery operations.
7. Keep doors locked and windows closed. If cab doors don’t automatically lock, always lock them manually (including the passenger door). Remove keys from unattended vehicles and ensure trailer locking and latching mechanisms are functioning properly.
8. Under some conditions it may be best to crack open windows and turn off the ventilation system. Windows are harder to break when down approximately a half inch instead of tightly closed. The ventilation system could allow smoke or teargas in the air to get getting into the cab.
9. In a situation where an attack may occur, removing the safety belt allows for quicker exit. In some situations it may be better to run than to be trapped inside the truck.
10. Conduct thorough pre-trip inspections before departing to reduce the chance of breakdowns.
11. If so equipped, use the onboard camera to document any incidents.
12. The Adverse Driving Conditions Exception under §395 Hours of Service changed on 09/29/20, extending the duty day by two hours. This is an important consideration if a driver is impacted by civil disturbances. Applicable to both property and passenger carriers, the new rule describes unusual road or traffic conditions that were not known or could not reasonably be known.

Contact EPIC Transportation & Logistics Risk Control for more information.

Insurance Products & Coverage

Business Interruption Update

While a new year may have begun, there is no end to the growing abundance of coronavirus-related business interruption lawsuits. The nearly 1,500 cases filed and resolved or still working their way through the court system in the U.S. will continue to shape similar legislation for months to come.

Cases seeking claims coverage under the presumption that an all risk policy should include physical damage caused by the presence of coronavirus on covered property have been largely decided in favor of insurers. About 70% of decisions have concluded that there cannot be coverage for alleged losses caused by coronavirus, especially when policies include virus exclusions.

More suits are likely to come, despite these results, as potential plaintiffs take a watch and see approach to how courts are deciding current cases. In Hollywood, some of the largest entertainment companies are waiting to see how cases play out before deciding whether or not to invest in coverage litigation for their companies.

A recent decision by a federal court in New York is one example of a case that could have an impact going forward. In Michael Cetta, Inc. v. Admiral Indem. Co., a steak house sought claims payout under three policy provisions – an actual loss of business income; an extra expense clause; and civil authority. In all three instances, the court ruled in favor of the insurer, confirming that the specific policy language of a policy and the circumstances surrounding losses are paramount in determining whether or not pandemic-related losses can be recovered. In commenting on the case, lawyers in New York have said the suit failed because it did not prove the presence of coronavirus at the covered property. Further, they have commented that courts there are inclined to find “direct physical loss or damage to property” when the virus is present, which could trigger payouts under other policy provisions.

This tactic seems to have garnered more favorable results for policyholders when pursued in court. In New Jersey, the Briad Group has filed a suit against American Guaranty and Liability Insurance Co. seeking payment under such provisions. The insurer has asked a court to dismiss the case, but no decision has yet been made.

In Ohio, a state court judge refused to dismiss a coronavirus business interruption lawsuit filed by a North Canton restaurant because the policy in question included civil authority and food-borne illness provisions. In California, insurance brokers received welcome news when a California federal court dismissed a professional negligence claim where plaintiffs alleged the broker failed to procure business interruption coverage sufficient to cover losses arising from the pandemic.

The cases are just two examples of the inconsistency of decisions and creativity of plaintiffs in bringing cases as they attempt to gain coverage for coronavirus-related business interruption losses. A larger factor that could produce a greater impact on business interruption cases going forward came into play on January 15, when the UK Supreme Court issued its final ruling on the appeal of the Financial Conduct Authority (FCA) suit.

In its ruling, the court sided with the FCA and the Hiscox Action Group, dismissing insurers’ appeals and providing guidance on the following key points:

• The interpretation of “disease,” “prevention of access,” and “trends” clauses
• The causal link that must be shown between business interruption losses and the occurrence of a notifiable disease
• The significance in quantifying business interruption losses caused by the pandemic and which occurred before coverage was triggered

The result of the ruling is that a majority of policyholders of non-property damage business interruption coverage will receive payment for their losses caused by the UK government’s national response to the coronavirus pandemic.

It will be interesting in the weeks and months ahead to see how the UK high court’s decision impacts ongoing business interruption cases in the United States.

Contact an EPIC broker for more information.

Presumptive Compensability Legislation

While the impact of the pandemic on workers’ compensation continues to be less severe than was initially thought last spring, coronavirus workers’ compensation claims increased in 17 states during the fourth quarter of 2020, signaling a shift could be imminent. A report released by the Workers Compensation Research Institute (WCRI) found variation in how the pandemic affected industries and the number of claims reported by states. Industries accruing the most claims include health care, retail and public service. Clerical and professional workers experienced the largest decline in coronavirus-related workers’ compensation cases.

Declines in cases appear to have led to an overall decline in private workers’ compensation insurer net premium written in 2020, according to a preliminary report from the National Council for Compensation Insurance (NCCI).

In states across the nation, presumptive compensability legislation continues to be introduced. In Vermont and Illinois, lawmakers proposed an extension of the state’s presumption laws for frontline workers. In Oregon, lawmakers recently introduced legislation to make coronavirus exposure or infection a compensable occupational disease. Labor groups there support such legislation.

In Minnesota, lawmakers introduced a bill that would make coronavirus infections a compensable illness for school workers. If passed, the measure would become effective the following day and would remain effective until July 30, 2021. The action follows the passing of two similar bills enacted for businesses and workers in December.

New York and Alaska have also introduced legislation to make coronavirus infection a compensable occupational disease for workers who must perform their jobs outside of the home during a period when non-essential businesses are closed and could be exposed to coronavirus. Of additional interest in New York is legislation seeking to authorize acupuncturists and therapy assistants to treat injured workers and separately, to remove an employer’s ability to require workers to fill prescriptions at designated pharmacies.

In North Dakota and Virginia, lawmakers introduced legislation that would make coronavirus an occupational injury by presumption. In North Dakota, 34 professionals would be considered essential and enjoy the presumption, including transportation workers, government workers, healthcare workers and school employees. In Virginia, the presumption would apply to first responders, law enforcement officers and correctional officers.

Whether the many presumptive compensability and other provisions being introduced and enacted will expire at the end of the pandemic or become permanent remains a point of interest for many employers. The evolving situation continues to warrant attention by insurance, human resources and safety departments.

For more information, contact an EPIC broker.

News of Note

The passage of another two weeks has brought forth more developments across the insurance world. Here is a rundown of recent news stories of interest.

• Frustrations boil at pace of vaccinations at long-term care facilities, New York Times, Jan. 16
• China builds hospital in 5 days as coronavirus cases rise in Beijing, Axios, Jan. 16
• Insurers balk at paying full price for telemedicine, The Providence Journal, Jan. 16
• Insurance implications of returning to normal, JD Supra, Jan. 15
• Lawmakers weigh coronavirus death benefits on presumption, Business Insurance, Jan. 15
• Air purifiers at CES 2021 are getting smaller, smarter and more innovative, CNET, Jan. 13
• Amid rising coronavirus cases, international governments provide long-term aid to local entertainment industries, Hollywood Reporter, Jan. 7
• Biden’s one-two stimulus punch, Axios, Jan. 1

HR & Employee Benefits Insights

Preparing for Cal-OSHA’s Required Coronavirus Prevention Program

In November, Cal-OSHA passed an emergency COVID-19 regulation that requires its states’ employers to implement a written COVID-19 Prevention Program (CPP).

Cal-OSHA issued FAQs to help clarify requirements:

• COVID-19 Prevention Program (CPP) Implementation – must be in writing, be made available at the workplace and include a last revision date. It is recommended that employers make the CPP available on their company intranet where all employees (and union members) have access to it.
• Exposure – means being within six feet of a coronavirus case for a cumulative total of 15 minutes or greater in any 24-hour period within or overlapping with the “high-risk exposure period.” In particular, question 19 of the FAQs discusses partitions; and question 57 addresses workplace exposures. There is value for employers in documenting the use of partitions and engineering controls.
• Exposed Workplace – On January 1, 2021, the definition of an exposed workplace was defined as any work location, working area, or common area at work used or accessed by a coronavirus case during the high-risk period, including bathrooms, walkways, hallways, aisles, break or eating areas and waiting areas. Importantly, it includes only the areas of the building where coronavirus cases were present during the high-risk exposure period.
• Training – The CPP requires eight topics to be included in training. Employers must document that they have provided this training to employees along with new items that include benefits available to employees who have been exposed to coronavirus at work. Previously covered topics do not have to be repeated, but new topics must be covered.
• Testing and Tracing – According to the Cal-OSHA regulation, California employers must conduct testing for current coronavirus infection. The tests do not have to be administered by a healthcare professional, and must be offered at no cost to employees during working hours. Options for locations to test are outlined in the FAQs.
• Notice Scenarios – Employers must provide written notice to employees, subcontracted employees and exclusive representatives within one business day of coronavirus exposure. Personal information about who has tested positive does not need to be provided. Information about coronavirus-related benefits, anti-retaliation and anti-discrimination, disinfection and safety plans should be provided to appropriate recipients. Employers are advised to have multiple notices in place – one suitable for close contacts and others for subcontracted employees and others. Importantly, separate templates for AB 685 and Cal-OSHA 3205 should be followed in preparing notifications.
• Quarantine periods – while a 14-day quarantine is recommended, only a 10-day period is required, per health board guidelines.
• Outbreaks – An outbreak is defined as three positive coronavirus cases within a 14-day period. During an outbreak period, employers must provide coronavirus tests to all employees at the exposed workplace immediately and one week later, except for those who were not present during the period of the outbreak. If employees are unwilling to be tested, those cases should be treated as safety violations and necessary disciplinary steps should be taken. Importantly, the state of California did not use the same definition for “outbreak” in SB 1159 as Cal-OSHA did in AB 685. Both must be addressed. Employers may fulfill their responsibility by reporting coronavirus infections to their local health departments and then complying with whatever steps are required by the health department.

While lawsuits have been filed against the Cal-OSHA regulation, they are not likely to change the current landscape or requirements in the short term. Much enforcement by Cal-OSHA continues, particularly in the food processing, agriculture and retail sectors. Particular attention is being paid by Cal-OSHA officials to complaints issued by employees.

Some of the measures employers are taking to hedge risk include implementing travel bans, and testing and strict distancing. In addition, some are organizing employees into zones that can be treated as separate workplace areas, in order to reduce exposure and potential outbreaks and narrow the definition of “exposed workplace.”

Access the Cal-OSHA FAQs

Cal-OSHA has also provided a fillable CPP template

EPIC has presented a webinar covering this topic. For more information, contact an EPIC team member.

Coronavirus Vaccine Considerations for Employers

While vaccine distribution and administration is underway across America, questions remain about whether or not people who have already been infected and recovered from coronavirus infection should be vaccinated and if so, when. One aspect of vaccination no longer in question is whether or not employers have the right to require employees to be vaccinated. The answer is yes.

In December, the Equal Employment Opportunity Commission (EEOC) issued coronavirus-specific guidance stating that mandatory vaccination policies are generally permissible during a pandemic, albeit subject to federal and state law limitations. Employers may even bar employees who refuse to be vaccinated from the workplace, provided they cannot create a reasonable accommodation. The guidance confirms what employment lawyers have expected.

When it comes to exceptions to the mandate, employers must generally provide two, limited exceptions – employees who decline the vaccine because they have medical conditions that would put them as risk if they were to be vaccinated; and sincerely held religious beliefs that bar taking vaccines generally.

The EEOC guidance states that employers may encourage or require vaccinations, but policies must comply with the Americans with Disabilities Act (ADA). In practical application, employers must carefully evaluate the risk that each objection to vaccination raises whenever an employee refuses to be vaccinated. Employers must show that unvaccinated employees would pose a direct threat due to a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation. An example accommodation could include allowing the employee to work remotely or take a leave of absence in lieu of vaccination.

The Society for Human Resource Management (SHRM) recommends employees and employers work together to determine whether a reasonable accommodation can be made. Also, if an employer plans to require employees to receive the vaccine, it should develop a written vaccination policy.

With growing distrust of the vaccine and only 58% of Americans indicating a willingness to be vaccinated, it also recommends clear and frequent communication with employees about how vaccinations will create a safer workplace.

Additional concerns employers will need to address ahead of time include how mandatory compliance will be tracked, as well as how legal claims that may arise from employee refusing to be vaccinated will be managed. Employers also need to consider the impact of mandatory vaccination on workers’ compensation. A mandate would likely require employers to pay for the vaccination and compensate employees for taking it (already a mandate in CA). Potential medical complications would also likely be compensable. The administrative burden and potential legal risk may cause many employers to strongly encourage, but not mandate, vaccinations.

EPIC has provided viewpoints for employers to consider. For additional information, contact an EPIC team member.

DOL Issues Opinion Letters Regarding Pay Calculations for Teleworkers, In-Home Caregivers

On December 31, the Wage and Hour Division of the U.S. Department of Labor (DOL) issued two Opinion Letters – FLSA2020-19 and FLSA2020-20. The former addresses what qualifies as compensable work time for an employee working at least part time at home and part time at the employer’s regular worksite. The letter tackles the issue of how to apply the continuous workday rule to remote employees.

The DOL brought clarity by defining compensable worktime as time spent “primarily for the benefit of the employer,” and clarified normal commute time as non-compensable. The letter provided a number of scenarios that have likely occurred with increased frequency during the pandemic and concluded that only time spent working at the office or working at home is compensable.

In letter FLSA2020-20, the DOL considered employees who are in-home, or live-in caregivers typically working shifts of 24 hours or more, and the practice of paying overtime based on an expected number of hours worked to live-in caregivers. Since tracking hours worked and not worked precisely in this situation is nearly impossible, the entire extended shift is compensable, excluding bona fide meal and sleep periods of up to eight hours per day. Specifically, the letter considers whether overtime payments can be excluded from the regular pay rate and credited toward the amount of overtime pay owed. It answers in the affirmative to both considerations.

The letters may be viewed on the DOL’s website:

• FLSA2020-19 Letter 
• FLSA2020-20 Letter

Contact an EPIC team member for more information.

OSHA Announces New Coronavirus Violations

On January 8, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced that it issued citations resulting in penalties totaling $3,930,981 from 300 inspections for violations relating to coronavirus.

The inspections revealed citations for the following violations:

• Lacking a written respiratory protection program
• Failing to provide a medical evaluation, respirator fit test, training on the proper use of a respirator and PPE
• Not reporting or recording an injury, illness or fatality on OSHA recordkeeping forms
• Failing to comply with the General Duty Clause of the OSHA Act of 1970

The citation and penalty totals reflect amounts through the end of 2020. Separately, on January 13, OSHA announced it was adjusting civil penalty amounts based on cost-of-living adjustments for 2021. OSHA’s maximum penalties for serious and other-than-serious violations will increase from $13,494 per violation to $13,653 per violation. The maximum penalty for willful or repeated violations will increase from $134,937 per violation to $136,532 per violation. All increases apply to penalties assessed after January 15, 2021.

Contact an EPIC team member for more information.

OSHA Form 300A Reporting Period is Approaching – Are You Ready?

The reporting period for some employers to publicly post OSHA Form 300A is approaching. From February 1 through April 30, 2021, OSHA requires some employers to make their “Summary of Work-Related Injuries and Illnesses” available to the public.

Employers with 10 or more employees, that are not exempt or partially exempt from OSHA’s Injury and Illness Recordkeeping Requirement must complete and post Form 300A each year, even if there were no OSHA-recordable cases.

A list of NAICS codes showing exemption from the recordkeeping mandate are available on OSHA’s website. Note that all employers, including those partially exempted by reason of company size or industry classification (NAICS code), must report to OSHA any workplace incident that results in a fatality, in-patient hospitalization, amputation or loss of an eye.

Records must be maintained at a worksite for at least five years. Each reporting period, non-exempt employers must post a summary of the injuries and illnesses recorded the previous year. Also, if requested, copies of the records must be provided to current and former employees, or their representatives.

The deadline for electronically reporting OSHA Form 300A data for calendar year 2020 is March 2, 2021. Collection began January 2, 2021. The collection of CY 2019 data and beyond will include the collection of establishments’ Employer Identification Number (EIN).

Only a small fraction of establishments are required to electronically submit their Form 300A data to OSHA. Establishments that meet any of the following criteria, which are applied at an establishment level and not to a firm as a whole, do not have to send their information to OSHA.

• The establishment’s peak employment during the previous calendar year was 19 or fewer, regardless of the establishment’s industry.
• The establishment’s industry is on this list, regardless of the size of the establishment.
• The establishment had a peak employment between 20 and 249 employees during the previous calendar year and the establishment’s industry is not on this list.

More information

Contact an EPIC team member for more information or with questions.

Insights From Across the Firm

EPIC thought leaders have written numerous articles on matters relating to coronavirus, all of which are available on EPIC’s website. The most recent articles include:

• Using Wellness Programs to Manage Conflict, January 11
• EPIC Announces Exclusive Cyber Product Access, January 8
• The Vaccine and Coronavirus’ Impact on Benefits and Policies, January 5
• Employers Mandating the Coronavirus Vaccine, January 4
• Departments Issue Final Regulations to Help Plans Maintain Grandfathered Status, January 4
• Medicare Part D Disclosure to CMS, January 4

Conclusion

Our understanding of coronavirus and its impact around the world continues to evolve at a rapid pace. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to novel coronavirus. More topics will be considered in future issues as our understanding of the virus and its impact continues to evolve. Please reach out to your EPIC broker for more information.

For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus 

Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations. 

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