The COVID-19 pandemic has had a severe negative impact on the economy, especially in lieu of the many temporary shutdowns and/or limited operating capacity orders enacted (and in some cases, still in effect) nationwide. Now, as companies have begun asking employees to return to the workforce, some are facing a new threat: A variety of coronavirus-related lawsuits putting those already in uneasy positions at greater risk of losing money – or worse. There is, however, a relatively simple means of protection available to employers that may prove worthwhile in situations like these: Employment practices liability insurance, commonly known as an EPLI.
But what exactly is an EPLI policy and what are some instances in which having one may be useful? A look at recent headlines can provide the answers needed to help you avoid following in rather unfortunate footsteps.
THE CASE(S) FOR COVID-19 PROTECTION
Walmart, Safeway and Tyson Foods are among the major corporations currently being sued for gross negligence and/or wrongful death following the onset of the COVID-19 pandemic this March. In the Tyson Foods’ case, four families have filed suit against the company alleging that an outbreak at its largest pork processing plant in Waterloo, IA, resulted in the deaths of four employees from COVID-19. The suit claims the company downplayed the risk its employees faced before covering up the outbreak itself to keep them on the job whereas the company says it followed recommended safety guidelines, investing millions to do so.
A similar claim is the basis of one such suit filed by family of Wando Evans, 51, an overnight stock clerk at a store in Evergreen Park near Chicago. A 15-year employee of the location, Evans died two days after being sent home; the suit alleges the Evergreen Park store failed to properly respond to several employees exhibiting symptoms, share this information with other workers and safeguard them with any proper personal protective equipment (PPE). The suit also says Phillip Thomas, Evans co-worker, died on March 29. While the outcome of both cases remains to be seen, one thing is certain: COVID-19 will have a significant impact in terms of both the number of suits filed against employers and their subsequent trials, the latter of which the National Law Review has detailed in full.
PREPARING PROPER POLICIES AND PROCEDURES TO PREVENT PROBLEMS
With state laws and policies for employers changing on a weekly basis, working with a professional employer organization (PEO) is an excellent way to help ensure you remain compliant and reduce risk. The National Association of Professional Employer Organizations (NAPEO) has a detailed list of concerns employers should be aware of on its web site; working with a PEO can help eliminate these by establishing guidelines and standards (for both employees and visitors/customers) in compliance with the Coronavirus Aid, Relief, and Security (CARES) Act. Preventing potential problems in the realms of reducing exposure risk (social distancing, work area setup, etc.), handling an outbreak and employee leave can provide significant assistance in keeping an organization out of the courtroom.
Avoiding costly legal affairs is also why an EPLI might be as essential for businesses and organizations as the employees they seek during this pandemic. EPLI covers businesses against claims made by workers that their legal rights as employees of a company have been violated. EPLIs cover a wide range of claims, including sexual harassment, discrimination and wrongful termination, among others. Costs of EPLIs are usually based on several factors including the industry, number of employees and risk factors involved. Think of an EPLI as a “in case of emergency, break glass” coverage: It should be used only in an extreme circumstance. Taking preventative measures up front to protect employees and your business can help eliminate the need for its use in the first place.
However, keep in mind that EPLI insurance policies are not – repeat, NOT – all-encompassing. Criminal/civil fines, penalties and/or punitive damages, physical injury and property damage claims are among the exclusions to EPLI polices. Most EPLI policies simply reimburse a company its costs for defending a lawsuit in court, judgments and settlements. Thus, if you haven’t established and then documented your organization’s efforts to (1) prevent the spread of coronavirus in the workplace; (2) outline actions taken once a potential sick employee and/or outbreak was identified; and (3) complied with employee leave and other related policies, you shouldn’t be surprised if (or when) legal action is taken against your organization.
EXCEL WITH EXPERIENCED EXPERTISE
As the expression goes, it’s always better to be safe than sorry when it comes to potential litigation against your business. As a PEO, we at Erigo specialize in helping organizations create policies that will reduce employers’ risk and avoid the need to utilize an EPLI. Now is the perfect time to invest in a PEO service that offers a comprehensive menu of services focused on compliance assistance with ever-changing federal laws to help reduce the risk of costly lawsuits. In much the same way we encourage everyone to practice social distancing and wear a mask, we likewise advise seeking counsel to address concerns in theory before you are forced to do so in practice.