Category Archives: Workers Compensation
Mixed ReactionsTo Workers CompCOVID-19 Expansions
State workers’ compensation boards around the country are amending rules for benefits payouts related to coronavirus, and several states have expanded or are considering widening access to workers comp coverage for COVID-19 beyond first responders and health care workers.
Kentucky and Illinois this week implemented emergency orders to provide access to public-facing essential workers, such as grocery, pharmacy, Postal Service and day care workers. And Minnesota’s legislature unanimously approved a bill that guarantees people in high-risk jobs who contract COVID-19 workers comp coverage without having to prove the infection was a direct result of their job. Most licensed peace officers, firefighters, paramedics, nurses, health care workers, correction officers, workers at secure state facilities, workers at long-term care facilities, and child-care providers are among the classes included in the Minnesota measure.
Lawmakers in Louisiana and New Jersey also have proposed legislation to expand COVID-19 coverage beyond first responders and health care workers, who traditionally are covered if they are exposed to a communicable disease in the course of their work.
While employee groups and unions applaud these moves, the changes could hurt the workers comp industry, some experts warn.
Robert Hartwig, clinical associate professor and director of the Risk and Uncertainty Management Center at the University of South Carolina in Columbia, said the changes present “a potentially enormous and unfair burden on workers compensation insurers that’s completely unprecedented in history.”
Hartwig pointed to the difficulty proving that the transfer of a communicable disease occurred on the job and added, “This is potentially extraordinarily costly to workers comp insurers, but also to many large employers who have either very high-deductible programs or are largely self-insured.”
He said these changes also could be “potentially catastrophic” to workers compensation state funds.
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/17/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/16/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/15/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/14/2020)
CORONAVIRUS WRAP-UP: PROPERTY AND CASUALTY (4/13/2020)
Coronavirus Wrap-up: Property/Casualty (4/7/2020)
Below are abstracts and links to recent articles related to coronavirus from a property and casualty insurance perspective.
Auto:
Less driving, fewer accidents: Car insurers give millions in coronavirus refunds
One of the largest car-insurance companies in the country and a smaller Midwestern auto insurer are refunding hundreds of millions of dollars to their policyholders, citing a dramatic drop in accident claims from Americans hunkered down in their homes, The Wall Street Journal reports.
Allstate providing more than $600M to auto insurance customers amid pandemic
Allstate announced that it’s providing a Shelter-in-Place Payback to help its personal auto insurance customers during the pandemic.
Business Interruption:
This insurance would have helped in coronavirus crisis; nobody bought it
PathogenRX, a parametric insurance policy developed by broker Marsh, Munich Re, and technology firm Metabiota, is designed to provide business interruption insurance in the event of a pandemic, Insurance Journal reports.
Wimbledon nets £100m coronavirus cancellation payout
When the coronavirus outbreak forced the cancellation of Wimbledon it looked like game, set, and match against the All England Club. It turns out, The Times reports, that the club has insurance that covers infectious diseases and is putting together a claim potentially in excess of £100 million.
Insurers warn on forced payouts for uncovered coronavirus losses
World insurers told governments on Monday that making them pay out on losses suffered due to the coronavirus that were not covered by policies risked destabilizing the insurance industry, Reuters reports.
Considering a business interruption insurance claim due to COVID-19? Check your policy first
Insurance brokers say viruses and pandemics are specific exclusions in many such policies, which are often included with standard property and casualty coverage. But whether COVID-19 is the basis for a business interruption claim remains an open question as government leaders and the plaintiffs’ bar wrestle over the issue.
How social inflation may affect coronavirus business interruption losses
COVID-19 could produce a big increase in social inflation, according to A.M. Best. The reason: expectations that businesses will sue their insurers in an attempt to access their business interruption coverage for losses relating to the coronavirus pandemic.
After SARS, insurers changed policies covering businesses
SARS infected 8,000 people and led to millions of dollars in business-interruption insurance claims – including a $16 million payout to a single hotel chain. As a result, The Washington Post reports, many insurers added exclusions to standard commercial policies for losses caused by viruses or bacteria.
Flood:
FEMA extends flood renewal period
The Federal Emergency Management Agency (FEMA) announced that it will extend the grace period to renew flood insurance policies to help policyholders affected by the coronavirus (COVID-19) pandemic. FEMA said it would push back the grace period from 30 days to 120 days.
Property:
Florida’s property insurer of last resort, announced it will suspend cancellations and non-renewals for the next 45 days.
Wildfire:
First responders are preparing for raging wildfires that they expect will consume thousands of acres and drive some residents from their homes in upcoming months. But this year, CNBC reports, preparations have stalled. The coronavirus pandemic has hit the country’s already strained emergency services, raising concerns over inadequate disaster relief during peak fire season.
Workers Compensation:
Catch coronavirus on the job? In Florida, workers comp may not cover you
Florida’s Chief Financial Officer has ordered the Division of Risk Management to fulfill workers’ compensation claims for frontline employees who work for the state, the Tampa Bay Times reports. But the order doesn’t include similar workers in the private sector.
Workers Comp Premiums Could SoarWith COVID-19 Claims
Health-care workers and emergency responders will benefit from rules eased in some states around workers’ compensation that will allow them to collect benefits if they can prove they caught Covid-19 on the job, Bloomberg reports.
But employers need to be aware of the changing rules and be prepared for the likely end result—skyrocketing premiums.
State workers’ compensation boards around the country are amending rules for benefits payouts to include health-care workers exposed to the virus and then quarantined. Attorneys are keeping a close eye on the questions, such as who should be eligible to receive benefits, how does a worker prove they caught Covid-19 on the job, and how will an influx of successful claims affect businesses’ premiums to insurance carriers.
Some say essential workers like grocery store employees and delivery workers also should qualify.
Related:
Advisen: COVID-19 prompts a host of questions for workers compensation cover
Will Workers Comp Claims for COVID-19 Be Paid?
While health workers and first responders might be more likely to be exposed, whether COVID-19 is compensable under workers comp is uncertain.
Whether workers compensation claims related to COVID-19 will be paid is a question to be answered case by case and state by state.
The world has seen numerous epidemics whose impact on public health is well documented, so you might expect to find guidance on compensability from these experiences. But according to the National Council on Compensation Insurance (NCCI), “You would be hard pressed to find meaningful information on how or even if the workers compensation system was affected” by the SARS, H1N1, Ebola, and Zika outbreaks.
Workers comp insurance typically covers employers for employee claims regarding “bodily injury by accident or bodily injury by disease.” Many state statutes, however, exclude “ordinary disease of life.”
While some occupations – for example, health care workers and first responders – might be said to have a higher probability than others for exposure to COVID-19, whether the disease is compensable under workers comp is uncertain.
“’Would time away from work during recovery be considered ‘temporary disability’,”’ NCCI asks, “or is it just normal ‘sick time’?”
Guaranteed benefits for some
Workers’ comp insurers in at least two states have said they will guarantee benefits for health workers and first responders.
Kentucky Employers Mutual Insurance Co. said it will pay wage-replacement benefits for any first responder or employee in the medical field who is quarantined because of direct exposure to a person diagnosed with COVID-19. The announcement follows a decision by the Washington State Department of Labor and Industries to pay wage-loss and medical treatment expenses for any health care worker or first responder who is quarantined because of coronavirus exposure. Washington operates a monopoly workers comp system, so that policy affects every employee covered by the state system.
It remains to be seen if other states will take the same measures relative to workers comp. For general health insurance, however, NCCI says at least 10 states have issued mandates to cover COVID-19. The mandates vary, but they include coverage for testing and visits to emergency rooms or urgent care facilities either in-network or out-of-network without deductibles or copays.
If expanded to more states, NCCI says, these mandates could limit workers comp claims in cases where only testing or quarantine are necessary.