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Employment practices liability exposures – COVID-19’s lingering impact?

Cyber Risk Management|Medioambiental
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By Joann D. Nilsson | June 14, 2022

This article is from our Directors and Officers Liability survey 2022 and discusses how COVID-19 may have impacted exposures in Employment Practices Liability exposures.

We have slowly begun to emerge from the pandemic and over the past two years we have seen the impact of COVID-19 affect all sectors of society. 59% of all survey respondents around the world view COVID-19 and lockdown measures as either ‘very’ or ‘extremely important’ and it remains a topic of interest for directors and officers.

While each region in the survey found COVID-19 and lockdown measures were a ‘very significant’ or ‘extremely significant’ risk for their organization’s business operations, in North America 62% of individuals surveyed believed COVID-19 and lockdown measures were either ‘very significant’ or ‘extremely significant.’ This was the third largest risk after economic climate and cyber attack.

The focus respondents gave to COVID-19 and lockdown measures is not surprising, with the U.S. having seen vaccine mandates implemented by the Government and subsequently challenged in the court system, until a recent ruling was eventually issued by the U.S. Supreme Court.

One of the most intensely scrutinized matters in the second half of 2021 was the Department of Labor’s Occupational Safety and Health Administration’s (OSHA) COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS). This would have mandated COVID-19 vaccinations or at least weekly testing for workers at companies in the U.S. with 100 or more employees by January 4, 2022, subject to legally required accommodations. On January 13, 2022, the U.S. Supreme Court issued a stay of OSHA’s ETS.

Employers not covered by another federal, state, or local mandate may choose to implement whatever policies and practices are best suited to the unique needs of their workplace.

Employers choosing to maintain workplace vaccination policies must still follow other applicable laws, such as Title VII and the Americans with Disabilities Act, and be cognizant of the requirements in their specific state, as several states have enacted measures that either restrict or impact vaccination requirements.

Many of the EPL claims coming out of the pandemic have been in relation to failure to accommodate based on religion or disability. A religious or medical accommodation is often requested by an employee when a conflict arises between a specific task or position the employee cannot fulfill due to a medical or religious reason.

Today, this means a vaccine mandate may create the need for an accommodation where an employee cannot fulfill that requirement due to medical or religious reasons and this is an issue which employers will need to navigate through the guidance of legal counsel.

While COVID-19 claims continue to manifest, these are not the only employment claims companies are facing, with 35% of respondents saying they found the risk of employment claims for their directors and officers (whether reputationally or financially) ‘very significant’ or ‘extremely significant’. This risk was highest in the energy and utilities sector at 40%. By slight contrast, in our 2021 survey, 38% of respondents found the risk of employment claims ‘very or extremely significant.’

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D&O Directors Liability Survey Employment Practices PDF 1.5 MB
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Associate Director — Claims Advocate, FINEX North America

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