Webcast Replay: COVID-19 Business Interruption and Employment Law Considerations

Health officials and governments around the world continue to fight the spread of COVID-19, which has afflicted more than 400,000 people and has led to more than 16,000 deaths in 194 countries and territories (as of March 25, 2020). Businesses are feeling the pandemic’s effects, with many companies — especially in the hospitality and retail sectors — temporarily shuttering their brick-and-mortar locations.

During the webcast, panelists discussed the implications of some ongoing actions aimed at containment. One question on many risk professionals’ minds is whether property and business interruption insurance policies will respond to orders — or suggestions — to close businesses and for people to stay home.

Bob O’Brien, managing director in Marsh’s US Property Claims Practice, said that traditional property insurance policies generally are triggered by insured physical loss or damage. There are questions as to whether insurers will consider the presence of COVID-19 on a business’ property to constitute physical loss or damage. He noted that companies might want to examine policy extensions regarding interruption by civil authority, but added that insurers may have different interpretations of these extensions.

As the pandemic and its disruptive effects continue, businesses with potential losses should ensure they collect necessary documentation — including specific facts surrounding losses in conjunction with policy requirements — and keep a careful record of government orders and/or directives.

Marina Tsatalis, a partner at the law firm Wilson Sonsini, addressed some common questions from employers, including:

  • How can employers screen employees for COVID-19? And what should employers do with that information?
  • What expenses are employers required to reimburse for employees working from home?
  • Can employers continue to operate in light of various lockdown and shelter-in-place orders?
  • What mechanisms are available to reduce costs related to the workforce?

Dr. Lorna Friedman, Global Health Leader within Mercer’s Multinational Client Group, noted that the virus is at an exponential stage of transmission. She outlined many of the concerns regarding the capacity of the health care system and noted the importance of having tests that identify both infection with COVID-19 and immunity to it.

As health care providers become overwhelmed, Dr. Friedman said, employers can provide telemedicine options to their employees. As people recuperate at home, she noted, it is imperative for other household members to follow strict protocols to limit transmission.

James Crask, Global Resilience Advisory Lead within Marsh Risk Consulting, encouraged businesses to start making plans for recovery: “The decisions you make today will have a very real impact on the quality and speed of the recovery process,” he said. However, organizations should keep in mind that employees might be anxious about returning to the office.

Tsatalis stressed the need to provide a place of employment that is free from known hazards, noting that screening at workplaces, social distancing measures, and more frequent cleaning and sanitization could continue when people start returning to work.

Daniel Kaniewski, a managing director with the public sector team at Marsh & McLennan Advantage and a former Bush and Trump administration official, stressed the important role companies can play within their communities. “The more resilient the business, the more prepared the community,” he said.

Jeff Smagacz, Ergonomics Practice leader within Marsh Risk Consulting, provided tips for the currently expanded remote workforce — establish routines, set up a dedicate work space, and take breaks.