As the economy in the United States reopens following weeks of widespread stay-at-home orders, don’t expect a quick return to “business as usual.” Reopening requires a lot more than just flipping a switch.
More than 73% of U.S. companies have not yet created a return-to-work strategy, according to a survey released on April 30 by Philadelphia-based law firm Blank Rome LP. The survey, which covered a wide range of industries, found that more than a third of companies expect their state, local or regional authorities to determine their return-to-work strategy.
Because the Covid-19 threat is not yet over, any return-to-work plan should include safety measures that reflect the “new normal” for workplaces across the globe. That means requiring employees and customers to wear facemasks, practice social distancing, work remotely, and work in staggered shifts to reduce the number of people in the workplace.
Some workers who are called back to work may be reluctant to do so for two reasons: Risk of infection, or loss of unemployment benefits that for many exceed their normal compensation. The USA Federal Pandemic Unemployment Compensation program provides an extra $600 a week between the end of March and July 31.
Some things businesses should consider as they reopen following Covid-19:
Hiring, firing and furloughing employees during the pandemic
Covid-19 creates more opportunities for employees to claim discrimination. Under new guidance issued by the U.S. Equal Employment Opportunity Commission (EEOC), employers cannot postpone a start date or withdraw a job offer to individuals who are at higher risk of contracting the virus. Many companies buy employment practices liability insurance (EPLi) to insure against lawsuits filed by employees alleging unfair labor practices. But they should also consult with a labor attorney before calling employees back to work to ensure they do not violate any workplace anti-discrimination laws. The EEOC posted a short question and answer document, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws”, as guidance for employers.
Expanded workers’ compensation coverage for Covid-19
Several states have increased access to workers’ compensation benefits for Covid-19 beyond first responders and health care workers. Now, essential workers such as grocery, warehouse, delivery and retail workers are also covered. This could potentially increase workers’ compensation costs for these types of businesses if a significant number of their employees contract the virus after returning to work. Since workers’ compensation premiums are based on claims experience, an increase in claims related to the virus would result in an increase in premiums at renewal time.
Business interruption: Is it covered?
Insurers say business interruption is not covered and are denying claims, but there are some attorneys asserting that it is, and they are filing lawsuits on behalf of businesses whose revenues were adversely affected by the shutdown. But some assert that businesses might be better off waiting before filing a business interruption claim, considering that the economy will be reopening slowly, and these losses will continue to mount.
Meanwhile, several states are enacting legislation to force insurers to cover Covid-19-related business interruption losses. In addition, federal legislation (H.R. 6494) has been introduced to make insurance coverage available for business interruption losses due to viral pandemics, forced closures of businesses, mandatory evacuations, public safety power shutoffs, and for other purposes.
You should keep close tabs on pre- and post-Covid-19 income and review policies to be sure there’s coverage before making a business interruption claim. Foa & Son has provided resources to help you understand claims and coverage for pandemic-related losses.
Covid-19-related employee benefits changes
The new CARES Act that Congress passed to address the pandemic requires employers to pay 100% of the cost of testing and treatment for Covid-19 infections without any employee cost-sharing. Access these resources on the Foa & Son website to learn more about how this affects USA benefits programs, as well as to understand enrollment changes including delays in open enrollments, and how reduced hours may affect full-time status, and more.
Covid-19 to accelerate market hardening
Before the pandemic hit, commercial insurance premiums were climbing in most lines of business going into 2020 renewals. The market is likely to harden even more as insurers shell out billions to pay Covid-19 losses. If your clients’ USA business coverage is not included in a global program, you may need more time to prepare their renewals this year. Expect insurers to seek higher deductibles and higher premiums, especially in those classes of business where there’s less competition. You also may need more information and additional coordination between your global and U.S. brokers to achieve the best outcomes.