Coronavirus (COVID-19) Update
Current situation in the United States
March 24, 2020
On March 11, 2020, the World Health Organization declared the rapidly spreading coronavirus a pandemic. A pandemic is a worldwide outbreak of a new virus that infects people easily and spreads in an efficient and sustained way. With a growing number of infections on almost every continent, the World Health Organization announced the outbreak has reached the “highest level” of risk for the world.
A message from McGriff's President and CEO on the coronavirus
The exposure risk may be higher for some travelers and workers in certain industries, including:
- Death care
- Airline operations
- Border protection
- Solid waste and wastewater management
- Travelers to areas where the virus is spreading
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) published “Guidance on Preparing Workplaces for COVID-19”(opens in a new tab) to help companies respond in the event of coronavirus in the workplace. The document was developed in collaboration with the U.S. Department of Health & Human Services (HHS). This guidance provides practical guidance for preventing the spread of COVID-19 (also known as novel coronavirus) and includes information on safe work practices and appropriate personal protective equipment based on the risk level of exposure. In addition to this guidance, OSHA recently launched a COVID-19 webpage(opens in a new tab).
Planning and response for employers
Many businesses and organizations have been working to minimize the spread of the virus by limiting non-essential travel and practicing social distance. Per the CDC, coordination with state(opens in a new tab) and local(opens in a new tab) health officials is strongly encouraged for all businesses so that timely and accurate information can guide appropriate responses in each location where their operations reside. Since the intensity of an outbreak may differ according to geographic location, local health officials will issue guidance specific to their communities.
The CDC has developed guidance for employers which includes recommended strategies for the COVID-19 outbreak. Employers need to consider how best to decrease the spread of acute respiratory illness and lower the impact of COVID-19 in their workplace in the event of an outbreak in the U.S., the CDC said. Employers should identify and communicate their objectives, which may include one or more of the following:
- Reducing transmission among staff
- Protecting people who are at higher risk for adverse health complications
- Maintaining business operations
- Minimizing adverse effects on other entities in their supply chains
This information, along with recommendations for an Infectious Disease Outbreak Response Plan, can be found on the CDC website(opens in a new tab).
The CDC also has prepared free communication resources(opens in a new tab), including videos, fact sheets, and posters.
For information on Human Resources and Leave policies, HIPAA and Protected Health Information, consult with your Employee Benefits Broker or employment practices attorney.
Now that COVID-19 has been declared a pandemic, all businesses, health care systems and schools should execute their pandemic preparedness plans.
The following governmental templates and resources are available to assist organizations in developing their pandemic plan:
- FEMA's Pandemic Influenza Template(opens in a new tab)
- WHO Checklist for Influenza Pandemic Preparedness Planning (PDF)(opens in a new tab)
- CDC National Pandemic Influenza Plans(opens in a new tab)
- OSHA Guidance on Preparing Workplaces for an Influenza Pandemic(opens in a new tab)
- Missouri Department of Health and Senior Services: Pandemic Influenza Business Planning Toolkit (PDF)(opens in a new tab)
The nature and magnitude of claims related to COVID-19 and the financial impact are not yet known. In most scenarios, businesses would be challenged to find coverage for losses stemming from this pandemic; however, with ever-changing legislative landscape, coverage could be afforded under some policies. Below is a summary of key insurance coverages and how they would typically respond.
Many clients have inquired about potential Workers’ Compensation claims arising from employees contracting COVID-19 during the course of their employment. As with any communicable disease, the answer is not black and white. Circumstances regarding any alleged workplace exposure would need to be investigated.
As with any ordinary virus, if it’s a condition that the general public is equally exposed to, the workers’ compensation policy would likely NOT apply. However, if the employee could prove that their job put them at greater risk than the general public of contracting the virus, some jurisdictions may grant coverage. Employers who have conducted their hazard risk assessment will be better prepared and have a better understanding of their true workplace risk of exposure.
Property Business Income
Typically, in order for a Property policy to provide coverage, there must be “direct physical loss or damage” to covered property from a covered peril. That is, the property must be demonstrably altered in some fashion. A disease, virus, or threat generally does not constitute direct physical loss. However, in the absence of a specific exclusion related to virus or communicable disease, some jurisdictions may hold that the actual, proven presence of virus can be sufficient to trigger coverage. Individual policies, locations, and situations vary, so it is important to discuss this with your broker and/or claims person.
Likewise, for Business Income coverage to trigger, there typically must be “direct physical loss or damage” to covered property from a covered peril. So, as with a Property claim, the best chance for finding coverage is with the proven presence of virus in or on a property.
In these days of government-imposed shutdowns and quarantines, many businesses are facing lost revenues from simply not being able to operate, or operating at a reduced capacity. There is no virus present at their property or even at a neighboring or supplier property; they’re simply not able to operate to due imposed restrictions or lack of business. Many policies contain a coverage grant for Civil Authority, but this grant of coverage typically requires the shutdown to be the result of a covered peril. The threat of virus in the community, unfortunately, is not a covered peril, so there is little to no coverage to the typical business offered by these coverage grants. Again, consult your broker and/or claims person for specific advice relative to your individual case.
Commercial General Liability
Standard Commercial General Liability policies do not contain exclusionary language related to virus or communicable disease. Accordingly, these policies should typically respond in a situation where an individual alleges they were infected with the coronavirus while on the insured’s property or if they were sold a product that caused infection. The burden of proof would be with the injured party to prove causation and associated damages, but the policy would provide defense cost coverage in the process.
Environmental policies vary greatly by insurers and the type of risk being covered. Some may contain specific grants, outright exclusions, or remain silent related to communicable diseases and viruses. Most environmental policies contain some degree of coverage for both third parties (clients, customers, visitors) as well as first party (the insured). These policies can potentially respond to some degree of cleanup, legal expenses, decontamination, bodily injury, property damage, or business interruption. Your broker and/or claims person can help you navigate this coverage and the claims process.
Directors and Officers
Directors and Officers policies may provide coverage for the costs and liabilities arising from shareholder lawsuits alleging that the company failed to act reasonably and plan appropriately in response to the coronavirus. Examples of this may include a failure to create adequate supply chains or failing to reveal financial risks that would result in financial loss to the organization.
Employment Practices liability policies may respond if claims are submitted as a result of sick leave and other human resource-related policies associated with the company’s coronavirus response plan.
COVID-19 causes respiratory illness and seems to be spreading much like flu from person to person. This virus was first identified during an investigation into an outbreak in Wuhan, China.
For confirmed coronavirus infections, the impact has ranged from minor illnesses with little to no symptoms to severe illnesses and even death. Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and death.
There is currently no vaccine for the COVID-19 virus. The best way to prevent infection is to avoid exposure. As a reminder, the CDC always recommends everyday preventive actions to help stop the spread of all respiratory viruses:
- Wash your hands often with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol-based hand sanitizer.
- Avoid touching your eyes, nose and mouth with unwashed hands.
- Avoid close contact with people who are sick.
- Stay home when you are sick.
- Use a tissue to cover your cough or sneeze, and then throw the tissue in the trash.
- Clean and disinfect frequently touched objects and surfaces.
Currently there is no specific antiviral treatment recommended for COVID-2019. People infected should receive supportive care to help relieve symptoms. For severe cases, treatment should include care to support vital organ functions. People who think they may have been exposed should contact their health care provider immediately.
Contacts for additional information
For more information and resources:
It Benefits You: Your Employee Benefits Newsletter
CARES Act Summary
COVID-19: Bracing for Impacts
Business Email Compromise
COVID-19: Potential Impact to Private Insurers
Beware of Coronavirus (COVID-19) Scams
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All McGriff Insurance Services, Inc., Risk Solutions are advisory in nature and are designed to assist the client in the establishment and maintenance of a safe workplace. The responsibility to provide safe and healthful work conditions and operations free from known risk and harm to employees, third parties, and the environment is, and shall remain, that of the client. This document, and any subsequent updates, is not a warranty that reliance upon them will prevent accidents and losses or satisfy local, state or federal regulations.
The information, analyses, opinions and/or recommendations contained herein relating to the impact or potential impact of coronavirus/COVID-19 on insurance coverage or any insurance policy is not a legal opinion, warranty or guarantee, and should not be relied upon as such. This communication is intended for informational use only. As insurance agents or brokers, we do not have the authority to render legal advice or to make coverage decisions, and you should submit all claims to your insurance carrier for evaluation. Given the ongoing and constantly changing situation with respect to the coronavirus/COVID-19 pandemic, this communication does not necessarily reflect the latest information regarding recently enacted, pending or proposed legislation or guidance that could override, alter or otherwise affect existing insurance coverage. At your discretion, please consult with an attorney at your own expense for specific advice in this regard.
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