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Managing the Risks of Employee COVID-19 Vaccination

By: Elaine Presley, CIC, CRM, Account Executive at KWIG

To mandate employee vaccination or to not? To encourage employee vaccination or to not? 

These are the tough questions many employers are contemplating as they begin bringing their workforces back to the workplace. Under the recent EEOC ruling, employers CAN require and incentivize employee vaccination prior to returning to the workplace as long as they are willing to make reasonable accommodations for employees who are exempt from mandatory immunization based on ADA standards and religious objections. 

While mandating or encouraging employee vaccination has its advantages, it also has its potential pitfalls. The effects on your employees, clients, customers and vendors must be considered. Insurance carriers generally advise following CDC guidelines, but the bottom line is that it is up to the employer to determine their playbook for returning to work. 

COVID-19 vaccination and other return-to-work policies present a whole new wave of risk management concerns for employers. However you decide to handle employee vaccination, it is crucial that you are prepared for the insurance claims that may arise as you return to the workplace. 

Insurance Policies Potentially Implicated By Employee COVID-19 Vaccination Policies

Employment Practices Liability Insurance, Workers’ Compensation Insurance and Cyber Insurance are the three primary insurance policies that may be triggered by COVID-19-related liabilities. 

Employment Practices Liability Insurance (EPLI)

EPLI is a type of liability insurance covering wrongful acts in the employment process, such as wrongful termination, discrimination, sexual harassment, and retaliation. COVID-19 vaccines and potential vaccine mandates add a new layer to EPLI exposures. 

An EPLI claim could arise if an employee alleges the employer failed to provide reasonable accommodations when they opted not to get the vaccine. Similarly, an employee could claim they were harassed or discriminated against as to getting (or not getting) vaccinated.

In response to the pandemic, employers have had to quickly develop and implement policies and procedures addressing remote work, layoffs, furloughs, pay cuts, workplace conditions, and more, which has and will likely continue to increase the lawsuits filed against employers.

Workers’ Compensation Insurance

Workers’ Comp provides medical and wage benefits to people who are injured or become ill at work. Today’s COVID-19 environment continues to raise challenging workers comp’ claims and questions.  

Generally, a workers’ comp policy should protect the employee and the employer in the case that an employee claims to have contracted the virus at work. Workers’ comp laws vary by state, but 17 states have extended workers compensation coverage to include COVID-19 as a work-related illness. These policies and outcomes related to COVID-19 workers’ comp claims continue to evolve.

Mandating or encouraging employee vaccination exposes other workers’ comp liabilities. For example, if an employee is required to receive the vaccination and experiences an adverse reaction, he or she may be entitled to workers’ comp benefits. 

On the other hand, a voluntary employee vaccination policy limits employer liability, but may not necessarily eliminate all liabilities depending on the unique circumstances and jurisdiction. Again, these cases and claims continue to evolve, so it is important to be aware of updated legislation and policies.  

Cyber Insurance

Cyber Insurance protects business from various technology-related risks, such as data breaches, digital security issues, hacking, and cybercrime. Because cybercrime is expected to cost $6 trillion in damages globally this year, having cyber insurance is more critical now than ever. Despite these startling statistics and recent cyberattacks, such as Colonial Pipeline, cyber insurance is often overlooked by businesses. 

As employers collect more health information from employees in response to COVID-19, they are exposed to even more cyber risk. Encouraged by the CDC, employers are screening employees for symptoms, asking about COVID-19 test results, inquiring about vaccination and determining whether an employees’ medical history places them at high risk. Collecting this health information is usually limited under HIPAA, ADA and other privacy laws, but employers have received more discretion because of COVID-19’s threat to public health. 

However, an employee’s health information is still extremely sensitive, and HIPAA requires that entities take reasonable measures to protect patient health information. A data breach may expose this sensitive information, which could lead to lawsuits and fines making it critical for your organization to be protected by cyber insurance in the unfortunate case of a breach. 

All in all, it is imperative to be prepared for claims and lawsuits like these with proper insurance coverage. Do you have questions about these COVID-19-related liabilities and insurance policies?  

We are Experts in the Unexpected

As experts in the unexpected, our team at Kemmons Wilson Insurance Group is here to help you navigate these unexpected circumstances and effectively manage the risks that employee COVID-19 vaccination policies present. Contact us to review the risks your business faces and evaluate your insurance coverages. 

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