Coronavirus-related insurance litigation is likely to move beyond business interruption coverage and into workers comp and general liability policy lines as states begin to lift restrictions on economic activity.
“There’s just going to be a bloodbath of litigation over the next 10 years,” former Mississippi Attorney General and counsel at Weisbrod Matteis & Copley Jim Hood told Bloomberg Law this week. “Even if the governor tells you to open up, that’s not going to protect you from a lawsuit.”
The Trump administration and Republican lawmakers are insisting that an employer liability shield be included in the next round of pandemic relief legislation, but it’s unclear whether Democrats will go along with the idea.
Ask the Experts: The Impact of COVID-19 on Workers Compensation (Property/Casualty 360, May 7, 2020)
Bill to Boost Aid to Dependents of Workers Killed by COVID-19 (Business Insurance, May 6, 2020)
Workplace Testing Guide May Provide Target for Lawsuits (Business Insurance, May 5, 2020)
A Better Workers’ Comp System: Silver Lining of COVID-19? (Property/Casualty 360, May 1, 2020)
California Facilitates Workers Comp for Virus Claims
California Gov. Gavin Newsom signed an executive order Wednesday that will make it easier for essential workers who contract COVID-19 to obtain workers’ compensations benefits. The governor said the order streamlines workers’ comp claims and establishes a rebuttable presumption that any essential workers infected with COVID-19 contracted the virus on the job. In effect, the change shifts the burden of proof that typically falls on workers and instead requires companies or insurers to prove that the employees didn’t get sick at work.
The California Federation of Labor, which asked for the change in a March 27 letter to the governor and legislative leaders, applauded the order. Dozens of business groups, led by the California Chamber of Commerce, pushed back last month on the labor federation’s request, saying the changes would force businesses to be the “safety net to mitigate the unprecedented outcomes of this natural disaster and the government’s response.”
Executive Order Threatens Stability of California Workers Compensation System (American Property Casualty Insurance Association press release, May 6, 2020)
California to Give Workers Comp to All Essential Employees Infected With Coronavirus (The Hill, May 6, 2020)
NCCI: Workers Comp Costs and COVID-19
If only 10 percent of health care workers contract COVID-19 and all of their claims are deemed compensable, workers’ compensation loss costs for that sector could double or even triple in some states, according to an analysis by the National Council on Compensation Insurance (NCCI).
Claims Journal reports that, in NCCI’s worst-case scenario, 50 percent of workers are infected and 60 percent of their claims are deemed compensable. That would result in $81.5 billion in increased costs —or two and half times current workers’ compensation loss costs — for the 38 states and District of Columbia, where NCCI tracks claims data. If eligibility is limited to first responders and healthcare workers and only 5 percent of those workers are infected, Claims Journal says, the increase in costs would be just $2 billion, assuming 60 percent of claims are paid.
From the Triple-I Blog: