COVID-19 and Workplace Discrimination Claims

Topics: EPLI Coverage

Summary: COVID-19 claims could increase as more companies welcome employees back onsite. This article looks at some common employment discrimination claims that could arise and why insurance carriers are seeing an uptick in demand for EPLI coverage.

Should Your Business Worry about COVID-19 Claims?

In March of 2020, the COVID-19 pandemic forced many companies to adjust to remote work to comply with their state’s stay-at-home orders. Working from home became the norm, with many organizations extending their work from home policies well into 2021. Over the last few months, as vaccinations became readily available throughout the United States, those businesses are slowly bringing workers back onsite.

Some companies are requiring employees to be vaccinated before they return, and these mandatory vaccinations are becoming a growing concern for insurance carriers. Currently, vaccination-related claims amount to less than 5% of total COVID-19 lawsuits, but that number is expected to increase. Major companies like Google, Facebook and CNN are among some of the big names who are requiring all employees to receive the COVID-19 vaccine before returning to the worksite.

Employment Discrimination Claims during the COVID-19 Pandemic

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As of June 2021, over 2,000 lawsuits related to COVID-19 have been filed in state and federal courts. Some of the most common COVID-19 claims are regarding paid leave, layoffs and downsizing, and discrimination.

Federal laws created by the U.S. Equal Employment Opportunity Commission (EEOC) protect employees from discrimination during the COVID-19 pandemic, including privileges that can protect them against retaliation for asserting their rights to be free from workplace discrimination. For instance, anti-discrimination laws keep employees safe from harassment due to age, race, color, religion, sex, disability, etc. These laws also ensure high-risk workers who may not be able to come to the workplace have arrangements that allow them to work from home. On the same note, employers cannot stop employees from working if they are high risk unless coming to work would create a significant hazard or substantial harm to their health.

The Americans with Disabilities Act (ADA), which states the type of information employers can request from their employees regarding their health and requires employers to “reasonably accommodate” employees with disabilities, appears to be the leading source of discrimination related to COVID-19 claims. However, laws prohibiting workplace discrimination based on age, sex, pregnancy and other bases also may see an increase in claims. As employers continue to welcome employees back, they need to keep in mind that even though they assume they are making their workers’ health and safety a priority, they should be careful to avoid situations that could lead to lawsuits due to federal laws protecting employees’ rights.

The EEOC created a technical assistance publication called Pandemic Preparedness in the Workplace and the Americans with Disabilities Act. Originally published in 2009 during the spread of the H1N1 virus, the document was revised in March 2020 to include COVID-19 updates.

Employment Practices Liability Insurance (EPLI) and COVID-19 Discrimination

Federal law does permit vaccination mandates. The EEOC laws do not prohibit employers from requiring all employees to be vaccinated against COVID-19. The guidance from the EEOC also includes:
  • Employers may inquire about employees’ vaccination status, including requiring proof via written documentation. However, all employee vaccination statuses must be kept confidential.
  • Employers should provide reasonable accommodations for those employees who cannot receive the vaccination due to medical disabilities, religious beliefs and practices or pregnancy. Reasonable accommodations include wearing a face mask onsite, social distancing measures, working modified shifts, working remotely or accepting reassignment.
  • Managers should watch for how mandatory vaccination requirements could have a disparate impact on certain employees based on characteristics prohibited under federal law. Some demographics or individuals may experience more difficulty in receiving the COVID-19 vaccine.
  • Managers must be properly trained on the COVID-19 policy and reasonable accommodation policy before implementation. Employees should also be aware of the policies and receive notification regarding reasonable accommodation based on disability on an individual basis.
These vaccination mandates are leading to an increase in companies looking for employment practices liability insurance (EPLI) coverage to protect them from the cost of defending discrimination lawsuits and compensation awards. EPLI is designed to protect businesses from employment-related claims, such as alleged discrimination, wrongful termination or demotion, sexual harassment and retaliation. Employment claims of any type can be devastating both emotionally and financially, damage a company’s reputation, and lower employee morale and productivity.

It’s not only the employees who do not feel comfortable getting vaccinated for personal, medical or religious reasons who could potentially file a COVID-19 claim. Vulnerable workers who could be at a higher risk due to the lack of a mandatory vaccination policy may also sue their employers.

There’s no doubt that business is booming for EPLI carriers. However, this increase in demand is also leading to a rise in premium rates. According to Jason Binette, EPLI product manager at AmTrust EXEC, “Many insurers are cutting their exposure by adding restrictions to new or renewed policies, requiring employers to bear more of the costs, and increasing premium rates.” AmTrust has recorded a 22% increase in requests for EPLI coverage since the pandemic began, driven in part by new business customers.

Binette adds that premium rates have jumped by 10-20%, and that he’s seen companies that have been around for 40 years who previously didn’t have employment practices liability insurance are now requesting it.

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COVID-19 Workplace Safety Policies

The COVID-19 pandemic will continue to impact an organization’s workplace safety policies and its employees. Along with following federal and state guidelines, employers should abide by OSHA’s guidelines to continue to help minimize the spread of the virus and keep the workplace as safe as possible for all employees.

Employment Practices Liability Insurance Coverage from AmTrust Financial

AmTrust EXEC offers a full suite of management liability products to provide coverage for a wide range of medium- and large-sized businesses, including EPLI. Most EPLI policies will reimburse a company for the costs of defending a lawsuit in court, as well as for judgments and settlements. The policy usually covers legal fees, regardless of the suit’s outcome. Contact AmTrust EXEC to learn more.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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