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Will employers liability insurance gain new relevance in response to COVID-19?

By James F. Dorion | April 27, 2020

The current pandemic may cause everyone to become more familiar with what, traditionally, has been an infrequently triggered line of coverage.
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The current pandemic may cause everyone to become more familiar with what, traditionally, has been an infrequently triggered line of coverage. We have already seen litigation alleging employers owed a now deceased employee a duty to be free of willful and wanton misconduct and reckless disregard as it pertained to providing a safe and healthy environment and, in particular, to protecting employees from contracting COVID-19 when it knew or should have known that individuals at the employer’s premises were at a very high risk of infection and exposure due to the high volume of individuals present at and circulating about on a daily basis.

Plaintiffs allege defendants violated the aforesaid duty because they failed to:

  1. Cleanse and sterilize the workplace in order to prevent infection of COVID-19
  2. Implement, promote and enforce social distancing guidelines promulgated by the governments of the United States of America and the States
  3. Provide employees with personal protective equipment such as masks, latex gloves and other devices designed to prevent the infection of COVID-19
  4. Warn employees that various individuals were experiencing symptoms and may have been infected by COVD-19 which was present and active at the workplace
  5. Adequately address and otherwise ignored other employees who communicated to management that they were experiencing signs and symptoms of COVID-19
  6. Follow the recommendations and descriptions of mandatory safety and health standards promulgated by the United States Department of Labor and the Occupational Health and Safety Administration as set out in Guidance on Preparing Workplaces for COVID-19
  7. Follow the guidelines promulgated by the Center for Disease Control and Prevention (CDC) to keep its workplace in a safe and healthy condition and to prevent employees from contracting COVID-19
  8. Develop an infectious disease preparedness and response plan as is recommended by the CDC
  9. Prepare or implement basic infection prevention measures as is recommended by the CDC
  10. Conduct periodic inspections of the condition and cleanliness of the workplace to prevent and/or minimize the risk of employees and others from contracting COVID-19 as is recommended by the CDC
  11. Provide employees with antibacterial soaps, antibacterial wipes and other cleaning agents as is recommended by the CDC
  12. Develop policies and procedures for prompt identification and isolation of sick people as is recommended by the CDC
  13. Develop, implement and communicate to its employees about workplace flexibilities and protections as is recommended by the CDC
  14. Implement engineering controls designed to prevent COVID-19 infection including, but not limited to, installing high-efficiency air filters, increasing ventilation rates in the work environment and installing physical barriers such as clear plastic sneeze guards as is recommended by the CDC
  15. Cease operations of the workplace and to otherwise close the workplace when it knew or should have known that various employees were experiencing symptoms of COVID-19
  16. Properly train its personnel to implement and follow procedures designed to minimize the risk of contracting COVID-19
  17. Periodically interview and/or evaluate its employees for signs and symptoms of COVID-19
  18. Prohibit employees who were exhibiting signs and symptoms of COVID-19 from working or otherwise entering the premises
  19. Personally, interview or evaluate whether prospective employees had been exhibiting signs and symptoms of the COVID-19 prior to the commencement of their employment

As general liability polices normally exclude coverage for suits involving bodily injury to employees, we expect employers liability will be the coverage that responds to suits like this.

What is employers liability insurance?

Employers liability (EL) insurance is the second part of most workers’ compensation (WC) policies. It is designed to help protect employers from certain litigation brought by employees outside of the WC system. While Part A of a WC policy pays out lost wages and medical expenses without a specific limit, Part B (EL) protects employers in the event an employee tries to sue for additional damages. Unlike Part A, EL is subject to set limits.

What is the difference between WC and EL?

WC provides coverage for employees injured while working, without regard to fault. It is a state-mandated program. While the employee must show they were hurt while performing the duties of their job, they do not have to prove the employer was negligent. WC will cover the costs of medical expenses such as treatments and medication, as well as partial wage loss. It does not cover any costs associated with pain and suffering. WC is often considered the "exclusive remedy" for job-related injuries. It is for this reason EL coverage is not often implicated.

Immunity from lawsuits in exchange for WC benefits is, however, not absolute in all jurisdictions or situations. For example, most states allow for an exception to WC as an exclusive remedy if the employer conduct that allegedly harmed the employee was intentional or “willful and wanton” in nature. Exactly what that means can vary by state.

Willful or wanton conduct can be acts that either must have been intentional or acts committed under circumstances exhibiting a reckless disregard for the safety of others, such as a failure, after knowledge of impending danger, to exercise ordinary care to prevent it or a failure to discover the danger through recklessness or carelessness when it could have been discovered by the exercise of ordinary care: Henslee v. Provena Hosps., 369 F. Supp. 2d 970, 977-978 (N.D. Ill. 2005).

It can mean “acting consciously in disregard of or acting with a reckless indifference to the consequences, when the Defendant is aware of her conduct and is also aware, from her knowledge of existing circumstances and conditions, that her conduct would probably result in injury.”: Duncan v. Duncan (In re Duncan), 448 F.3d 725, 729 (4th Cir. Va. 2006).

It may also be described as “A course of action which shows actual or deliberate intention to harm or which, if not intentional, shows an utter indifference to or conscious disregard of a person's own safety and the safety of others.": Siemer v. Nangle (In re Nangle), 274 F.3d 481, 483 (8th Cir. Mo. 2001).

What does EL cover?

Coverage applies to all EL claims not specifically excluded. An EL policy usually contains exclusions potentially relevant to COVID-19 claims, for example, it excludes:

  • Any obligation imposed by a WC, occupational disease, unemployment compensation or disability benefits law, or any similar law.
  • Bodily injury intentionally caused or aggravated by the employer. Note that this exclusion can create challenges because plaintiffs need to allege conduct egregious enough to get them outside WC as an exclusive remedy, but in doing so, they may plead in a way that causes insurers to raise this exclusion.
  • Bodily injury occurring outside the United States of America, its territories, possessions and Canada. Note that this exclusion does not apply to bodily injury if a citizen or resident of the United States of America or Canada is temporarily outside of the country.

Some additional notes on EL coverage:

  • It is written on a per occurrence basis. For most bodily injury claims, the application of this concept is straightforward: for coverage to apply, the bodily injury must occur during the policy period. For occupational disease, it can be more complicated. Coverage only applies if the employee was exposed to the conditions causing or aggravating the disease during the policy period.
  • It does not apply in those states or jurisdictions that have monopolistic state funds; specifically, Ohio, North Dakota, West Virginia, Wyoming, Washington, the U.S. Virgin Islands and Puerto Rico.
  • Deductibles typically respond on a “per employee” basis.
  • The policy limit is usually aggregated.
  • Defense costs are generally paid in addition to (i.e., they do not reduce) the policy limit.
  • Often, an umbrella or excess policy will extend over the EL policy to provide additional coverage.

Decisions about how coverage will respond to claims relating to COVID-19 will be made by each insurer based on the facts of each claim, the policy at issue and applicable law. To be well prepared for coverage discussions with insurers, policyholders need to rely on experienced resources to help assess the policy terms and conditions, advocate on their behalf and work to frame the facts and circumstances surrounding any such claims in the most favorable light for insurance recovery. Finally, it is critical to report claims to all potentially responsive policies in a timely fashion.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


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