Covering Coronavirus: Risk Considerations

EPIC Risk Advisory Bulletin

Volume 1, Issue 5

The global COVID-19 (coronavirus) pandemic remains both dynamic and fluid. We continue to see unprecedented disruptions at home and abroad.

In this issue, we are taking a focused look at:

1. General Information on Coronavirus
2. Supply Chain and Business Risks
3. Insurance Products and Coverage Information
   • Will Business Insurance Policies Cover Coronavirus Claims?
   • Cyber: Coronavirus is Not the Only Danger Going Viral
   • Insurance Solutions: Cyber and Crime Coverage with Risk Management Tips
4. Human Resources and Employee Benefits
   • Essential Functions According to CISA
   • Wellness Tips for Workforces Now Working From Home
   • Telecommuting and Possible Workers’ Compensation Claims
   • Employee Benefits Insights

The information below is intended to provide a high level overview of critical areas of concern for businesses around coronavirus. Consult your EPIC insurance broker for more in-depth guidance.

General Information on Coronavirus

While the best source for timely information on the coronavirus pandemic remains the Centers for Disease Control (CDC) and the World Health Organization (WHO), EPIC has compiled resources to aid in understanding the impact of the pandemic on employers, their workforces and managing risk.

Source: John Hopkins

Supply Chain and Business Risks

On March 18, The Federal Motor Carrier Safety Administration issued an Expanded Emergency Declaration. It provides nationwide-relief from hours of service regulations for certain commercial motor vehicle operations, the first of its kind since the rules were implemented in 1938. Within each state, governors have been issuing intrastate exemptions that are similar to the Federal version.

The federal declaration provides regulatory relief for commercial motor vehicle operations providing direct assistance in support of emergency relief efforts related to coronavirus outbreaks, including transportation to meet immediate needs for:

1. Medical supplies and equipment related to the testing, diagnosis and treatment of coronavirus;
2. supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of coronavirus such as masks, gloves, hand sanitizer, soap and disinfectants;
3. food, paper products and other groceries for emergency restocking of distribution centers or stores
4. immediate precursor raw materials, such as paper, plastic or alcohol, which are required and to be used for the manufacture of items in categories (1), (2) or (3)
5. fuel;
6. equipment, supplies and persons necessary to establish and manage temporary housing, quarantine, and isolation facilities related to coronavirus;
7. persons designated by Federal, State or local authorities for medical, isolation, or quarantine purposes; and
8. persons necessary to provide other medical or emergency services, the supply of which may be affected by coronavirus response.

Direct assistance does not include routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration.

Guidance relative to the declaration follows.

What commercial motor vehicle (CMV) operations have been given relief?

The Emergency Declaration provides regulatory relief for those providing direct assistance in support of emergency relief efforts related to the coronavirus pandemic, including transportation to meet immediate needs. Direct assistance does not include routine commercial deliveries, or transportation of mixed loads that include essential supplies, equipment and persons, along with supplies, equipment and persons that are not being transported in support of emergency relief efforts related to coronavirus.

The exemption is for Parts 390 – 399 of the Federal Motor Carrier Safety Regulations (FMCSR) except as otherwise restricted by this Emergency Declaration. What regulations are included?

Among the major regulations are those pertaining to driver qualification, hours of service and vehicle maintenance. The FMCSR note minimum requirements; additional measures may be implemented. Caution is urged as one trip may constitute direct assistance and another may not. If a driver is involved in a serious collision while not engaged in direct assistance, and compliance with the above major regulations cannot be demonstrated, the driver may be subject to enforcement action in addition to costly legal consequences. It may also place the entire operation at risk from an insurance perspective.

This is not an exemption from the controlled substances and alcohol use and testing requirements (Part 382), the commercial driver’s license requirements (Part 383), the financial responsibility (insurance) requirements (Part 387), the hazardous material regulations (Parts 100-180), applicable size and weight requirements, or any other portion of the regulations not specifically exempted under to §390.23.

What services and supplies are covered by an emergency declaration?

Generally, direct assistance includes the immediate restoration of essential services (such as electricity, medical care, sewer, water, telecommunications, and telecommunication transmissions) or essential supplies (such as food and fuel). It is not possible to list what would be essential in each emergency situation. Operations providing these types of services may be defined as a Utility Service Vehicle (USV) operation under SAFETEA-LU Section 4132 and these operations are already exempt from all provisions of Part 395 Hours of Service.

Where do the emergency exemptions apply?

Drivers responding to provide direct assistance to a declared emergency are exempt from applicable regulations in all States on their route to the emergency, even though those States may not be involved in the emergency or stated in the declaration of emergency.

Are motor carriers required to obtain approval from the FMCSA prior to participating in the emergency relief effort?

No.

Is there a need to identify vehicles or carry any paperwork onboard?

There are no specific requirements to identify a vehicle operating under an emergency declaration, or for paperwork that must be carried on the vehicle. Drivers should be prepared; however, to explain to law enforcement officers how their shipment qualifies under the emergency provisions.

Drivers are listed as critical and essential workers in the Department of Homeland Security advisory titled Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response, which was released on March 19. It is recommended that all transportation employees carry business cards and/or other credentials to show they are part of the trucking industry. This should be sufficient to allow them to continue their work should any enforcement personnel ask.

Are drivers required to stop at weigh stations when operating under a declared emergency exemption?

Weigh stations are managed by individual States, so requirements to stop vary. Unless advised otherwise, it should be assumed that normal rules apply even during a declared emergency.

Under Part 395 hours of service, how do drivers log time when operating under an emergency exemption?

As Part 395 does not apply when operating under declaration of emergency, records of duty status are not required. It is recommended that, for future reference, an explanation is noted in the log “remarks” section without completing the detailed grid. Drivers using electronic logging devices (ELDs) can use the “personal use” setting on their ELD to track time, though they should include an annotation to indicate the time that was spent providing emergency relief. Selecting “personal use” requires drivers to log in to their ELDs, avoiding the creation of unassigned driving records that would need to be managed later. 

How should drivers interact with law enforcement during vehicles stops?

Law enforcement will be following the CDC’s recommended practices and will attempt to maintain a distance of at least 6 feet as best as possible. As officers do at each vehicle stop, upon initial contact they will be evaluating the driver for signs of an illness or fatigued driver under Part 392, and are likely to engage in dialogue and outreach pertaining to coronavirus.

What precautions can be taken to protect drivers from coronavirus?

• Educate everyone in the organization. The latest information on coronavirus is available on the CDC website.
• Insist on compliance with personal protective measures – practice social distancing, frequent hand washing and avoid unnecessary contact by replacing handshakes with alternative forms of greetings.
• Increase frequency of cleaning and disinfection of driver and employee touch-points on vehicle equipment such as door knobs, handles, writing surfaces, countertops, etc.
• Disinfect maintenance shops; consider using a cleaning crew. Extra hand sanitizer stations should be placed throughout shops.

For more information or coverage questions, contact your EPIC broker.

Insurance Products and Coverage

Will Business Insurance Policies Cover Coronavirus Claims?

While uncertainty abounds around what coronavirus-related damages may be covered by business insurance policies, the general expectation at the moment is that few damages directly incurred by a professional services firm are likely to be covered under the firm’s typical business insurance policies. The linked report concerns preparedness actions firms should take now. Among other things, it notes that certain states are proposing laws that would require insurers to cover coronavirus-related cases for certain sized businesses.

Access Insurance Coverage Issues Report 

Cyber: Coronavirus is Not the Only Danger Going Viral

Sadly, times of uncertainty and crisis provide great opportunities for cybercriminals. With everyone’s attention focused on health and safety, we are all more susceptible to being deceived. Examples of coronavirus-related cybersecurity dangers include:

Phishing Attacks

Emails containing information about coronavirus sometimes contain downloadable attachments with malware. A common digital coronavirus infection kit includes a downloadable version of the Johns Hopkins University interactive map of global infections.

Fraudulent Domain Names/Websites

Fraudulent domain names and websites with “coronavirus” in the name are up and running. Cybercriminals create full website pages with coronavirus maps or information in attempts to trick users into downloading malicious files.

Remote Workplace System Vulnerabilities

Most businesses have now transitioned to a fully remote work environment. Due to the abruptness of the shift to remote work, some remote systems are overburdened by the demand. If these virtual networks are not adequately supported or updated, they may contain security gaps.

On March 6, 2020, the Cybersecurity and Infrastructure Security Agency (CISA) warned the population about coronavirus-related scams and suggested the following precautions:

• Avoid clicking on links in unsolicited emails and be wary of email attachments.
• Use trusted sources such as legitimate, government websites (look for the “.gov” in websites) for up-to-date, fact-based information about coronavirus.
• Do not reveal personal or financial information in email or over the phone and do not respond to email solicitations for this information.
• Verify a charity’s authenticity before making donations.
• Ensure your virtual private network and other remote access systems are up to date and fully patched.
• Enhance system monitoring for early detection and alerts on abnormal activity.
• Implement multi-factor authentication.

In addition to normal precautions such as washing hands and practicing social distancing, be hyper-vigilant when it comes to cybersecurity.

Insurance Solutions: Cyber and Crime Coverage with Risk Management Tips

There are insurance solutions available for ransomware protection, including Cyber coverage and Crime coverage.

Cyber Coverage

Cyber risk mitigation involves taking proactive steps to protect against and reduce the adverse effects of the key risks to an organization. Implementing network security defenses, incident response plans and employee training are all essential elements of cyber risk mitigation. However, it will not be enough. The reality is that no organization is immune from a cyber-attack. This is where insurance can help.

Comprehensive stand-alone Cyber insurance will help protect an organization’s balance sheet by transferring some of the costs associated with the inevitable breach. It complements and supports active security measures by providing third-party regulatory and liability coverage as well as a host of first-party response, remediation and recovery insurance. In addition, most cyber markets also provide free or discounted pre-loss services to assist an organization in breach preparedness.

In the case of ransomware, organizations should seek coverage that includes digital restoration and extortion coverage. It is important to try to avoid “inadequate security exclusions.” For more information, contact your EPIC broker.

Cyber-Related Risk Management Tips

In addition to insurance, following a few best practices, such as the following, helps mitigate risk.

• Develop, implement and regularly update and test a holistic incident response plan that includes IT, HR, Accounting Staff, Security and Management.
• Appoint a Computer Information Security Officer.
• Identify, contain and protect any Personal and Corporate Confidential or Sensitive Information.
• Continually maintain and upgrade computer systems and software.
• Implement mandatory employee training to better prevent phishing, unauthorized transfer of funds, or unwitting data breach.
• Encrypt all mobile devices.

Cyber coverage is not the only kind of insurance to consider. Crime coverage can also be part of a well-balanced risk management strategy.

Crime Coverage

Commercial Crime insurance provides first-party coverage intended to help an organization recoup losses due to employee dishonesty, theft of money or securities, robbery, burglary, forgery and alteration, and theft of client property. In addition, Commercial Crime policies also typically include coverage for Computer Fraud, Wire Transfer Fraud and Social Engineering Fraud. Today, many stand-alone Cyber policies also include similar or identical coverage extensions. This means there is a potential for coverage gaps as well as overlapping and/or redundant coverage. Organizations should strive to coordinate coverage between stand-alone Cyber and Crime policies to ensure they are able to maximize potential insurance recoveries in the event of an incident.

In addition to the above, most Commercial Crime policies also provide a limit for investigation costs for covered loss, assisting the Insured in paying for the complex process of determining the extent of the loss once the fraud has been uncovered. Coverage is typically on a loss discovered basis, meaning that the cumulative loss over time, regardless of when it took place, is covered by the policy in place when the loss is discovered.

Crime-Related Risk Management Tips

In addition to Crime coverage, the following tips can aide in managing risk.

• Establish an anti-fraud policy and code of conduct, with a hotline for employees to call if they suspect fraudulent activity. Conduct anti-fraud training and procedures for employees, managers and executives.
• Conduct external audits of internal controls used in financial reporting.
• Maintain multi-person controls in accounting and inventory.
• Vet, update and purge approved vendor lists at least annually.

While no organization can be completely immune to cybercrime, insurance coverage and risk management best practices can help mitigate the threat.

Human Resources and Employee Benefits

Essential Functions According to CISA

The Cybersecurity & Infrastructure Security Agency (CISA), a division of the U.S. Department of Homeland Security, issued an advisory on March 19 titled “Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response.”  This guidance is intended to help identify those functions that are deemed critical to public health and safety, and economic and national security. This includes industries such as medical and healthcare, telecommunications, information technology systems, defense, food and agriculture, transportation and logistics, energy, water and wastewater, law enforcement, and public works.

Wellness Tips for Workforces Now Working From Home

While daily life is changing minute-by-minute, so are options for employers to provide wellness to employees. Many vendors are offering adjustments and discounts while social distancing measures are in place. Following are a few such vendor discounts.

• Vital Check – In addition to onsite preventive care visits (at no additional cost beyond a preventive care claim), Vital Check is currently offering free telemedicine consultations to companies (100% covered by insurance). Medical doctors, including infectious disease specialists at Weill-Cornell, give employees one-on-one guidance and counseling on the virus, review any symptoms and concerns, and advise on appropriate next steps.
• The Fruit Guys – Fruit and snack home deliveries are currently being offered at a 25% discount through April 30. Click Here for more information.
• Headspace – There is a large library of meditations through the Headspace app, including some free meditations in the “Weathering the Storm” collection, which includes free meditations, sleep and movement exercises.

While many more resources exist to help employers and their workforces through this challenging time, the above provide a good place to start.

Telecommuting and the Possibility of Workers’ Comp Claims

While many Americans work from home, employers may see an increase in workers compensation claims. Some hazards normally covered at worksites, such as exposed cords, objects and wires, may pose a threat at home. These threats could become unforeseen exposures for employers. In California, the potential for risk is greater, given that mental stress is compensable.

Employers new to offering telecommuting or having employees work remotely for the first time should communicate and provide training on workplace safely in the home. Telecommuting safety checklists and ergonomic best practices can be shared as part of a communication strategy.

It is important to help employees set up a safe and ergonomically sound workplace to help mitigate the risk of workers compensation claims and more importantly, to encourage the wellbeing of employees. For example, employees may be working at a kitchen counter that is too high, or sitting on a couch with a laptop that is uncomfortable for long periods or work.

Employers will need to consider uncommon requests to help employees, such as requests for office chairs to be delivered to homes, standing desks and more. Think through what employees will need to work from home safely and productively, and then make provisions for that equipment, which can include hardware, furniture and internet connectivity.

When issues do arise in the home workplace, reports of injury may be delayed, which can further expose employers and lead to increased defense litigation costs. The questions and answers below provide further considerations for employers.

How do I decide if a case is work-related when the employee is working at home?

Cal/OSHA states that injuries and illnesses that occur while an employee is working at home, including work in a home office, will be considered work-related if the injury or illness occurs while the employee is performing work for pay or compensation in the home, and the injury or illness is directly related to the performance of work rather than to the general home environment or setting.

For example, if an employee drops a box of work documents and injures his or her foot, the case is considered work-related. If an employee’s fingernail is punctured by a needle from a sewing machine used to perform garment work at home, becomes infected and requires medical treatment, the injury is considered work-related. If an employee is injured because he or she trips on the family dog while rushing to answer a work phone call, the case is not considered work-related. If an employee working at home is electrocuted because of faulty home wiring, the injury is also not considered work-related.

When it comes to determining establishment locations, it is helpful to know that OSHA does not consider the worker’s home to be an establishment for record-keeping purposes. OSHA considers the worker’s establishment to be the office to which he or she reports, from which he or she receives direction or supervision, collects pay, and otherwise stays in contact with the employer. It is at this establishment that the log is kept. More about Form 300 log purposes and determining establishment locations can be found on OSHA’s website.

Does our organization need a telecommuting policy?

Employers without telecommuting policies may want to create them. Those with existing policies may want to consider updating them to address the coronavirus pandemic. Policies should:

• Make clear which positions may work from home
• Inform employees clearly about how to request to work from home, preferably in writing
• Include return to work protocols
• Outline employee accountability
• Tell employees how and who to notify if and when they develop symptoms
• Remind employees to protect company property and data
• Ensure desktop applications use secure authentication and are safeguarded against cyber threats

Working remotely during a pandemic is unprecedented and stressful, but with proper planning and cooperation, employers and employees can implement it successfully and keep the overall economy moving. Should you need additional resources on OSHA’s standards regarding telecommuting, please contact your EPIC broker, who can connect you with helpful information and solutions.

Employee Benefits Insights

EPIC’s employee benefits leaders have written several insightful articles on matters related to coronavirus and employee benefits, all of which are available on EPIC’s website. Those articles include:

• Marketplace Options for Employees if They Lose Employer-Provided Health Insurance
• Coronavirus is a Major Challenge to Employers and Human Resource Professionals
• IRS Announces that HDHPs Can Cover Coronavirus Testing at No Cost with No Effect on HSA-Eligibility
• Who Pays for Coronavirus?
• A Message From EPIC’s Employee Benefits Financial Team
• How will Coronavirus Costs Impact Health Plans?
• Congress Passes Families First Coronavirus Response Act
• Feds Provide Relief to Employers for Costs Associated with FFCRA

Conclusion

Our understanding of coronavirus and its impact around the world continues to evolve at a rapid pace. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to novel coronavirus. More topics will be considered in future issues as our understanding of the virus and its impact continues to evolve. Please reach out to your EPIC broker for more information.

For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus 

Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations. </small class>

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