Covering Coronavirus: Risk Considerations

EPIC Risk Advisory Bulletin

Volume 1, Issue 27

In this issue, we take a focused look at:

1. Supply Chain and Business Risks
   • Coronavirus Guidance for Long Haul Truck Drivers
   • State Driver’s Licensing & FMCSA Waivers Update
2. Insurance Products and Coverage Information
   • Ransomware on the Rise, Healthcare is Top Target
   • New COVID-19 Business Interruption Ruling Worries Insurers
   • Pending BI Legislation Update
   • EPL Market Spotlight
   • Presumptive Compensability Update
   • News of Note
3. Human Resources and Employee Benefits
   • OSHA Issues Respiratory Protection Guidance for LTC Workers
   • Oregon OSHA Adopts Temporary Coronavirus Rule
   • OSHA Issues Another $500,000 in Coronavirus Citations
   • OSHA 300 Recordkeeping Webinars Announced
   • NSC Report: Most Employers Implementing Worker Safety Measures
   • Updated Assistance on Monitoring States’ Pandemic Guidance
   • Insights from Across the Firm

The information presented here 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.

Supply Chain & Business Risks

Coronavirus Guidance for Long Haul Truck Drivers

The Centers for Disease Control and Prevention (CDC) has updated its guidance document, “What Long-Haul Truck Drivers Need to Know about COVID-19” to communicate the potential sources of exposure to coronavirus for long-haul truck drivers. Those sources include having close contact with:

• Truck stop attendants
• Store workers
• Dock workers
• Other truck drivers
• Others with COVID-19

Additionally, the guidance encourages long-haul truck drivers to avoid touching their nose, mouth or eyes after contacting surfaces touched or handled by a person with coronavirus. The CDC also encourages employers to have a coronavirus response plan in place to protect drivers that follows CDC Interim Guidance for Businesses and Employers.

For more information, along with the CDC’s full guidance for long-haul truck drivers, access the CDC’s website

Contact an EPIC Transportation and Logistics team member for more information.

Update on State Driver’s Licensing Agencies & FMCSA Waivers

Motor Vehicle Administrations are handling driver licensing and vehicle registration differently amidst the ongoing coronavirus pandemic. To view consolidated information about how each state is processing driver’s licenses, visit the American Association of Motor Vehicle Administrators (AAMVA) website and click on the “click here” button beneath the “Jurisdiction Response to COVID-19” message.

Two months ago, the Federal Motor Carrier Safety Administration (FMCSA) extended several waivers pertaining to expiring Commercial Driver’s Licenses (CDLs) and Commercial Learner’s Permits (CLPs) through the end of the year. This move was made to provide flexibility to Commercial Motor Vehicle (CMV) operators in light of the ongoing coronavirus pandemic.

It remains important to ensure drivers address any upcoming expirations sooner rather than later, in order to avoid any drivers being unqualified to operate vehicles. Details on the three wavier extensions are as follows.

1. Waiver in Response to the COVID-19 National Emergency – For States, CDL Holders, CLP Holders and Interstate Drivers Operating Commercial Motor Vehicles

The FMCSA extended the maximum period of CDL validity for CDLs due for renewal on or after March 1, 2020 and for CLPs without requiring CLP holders to retake the general and endorsement knowledge tests. This also waives the requirement that CDL holders, CLP holders, and non-CDL drivers have a medical examination and certification, provided they have proof of a valid medical certification and any required medical variances that were issued for a period of 90 days or longer. This waiver is effective October 1, 2020 and expires on December 31, 2020.

2. Three-Month Waiver in Response to the COVID-19 Emergency – For States and CLP Holders Operating Commercial Motor Vehicles

The FMCSA extended the waiver from the requirement that a CLP holder be accompanied by a CDL holder seated in the front seat of the vehicle while the CLP holder operates a CMV on public roads or highways. A CLP holder may operate a CMV on public roads or highways without an accompanying CDL holder present in the front seat of the vehicle, provided that the CDL holder is elsewhere in the cab. This waiver also allows a state to administer a driving skills test to any out of state CDL applicant, regardless of where the applicant received driver training. This waiver expires on December 31, 2020.

3. Waiver for States Concerning Third Party CDL Skills Test Examiners In Response to the COVID-19 Emergency

The FMCSA is renewing the waiver of the requirements for third party CDL test examiners who previously completed a CDL skills test examiners training course and have maintained a valid CDL test examiner certification. This waiver allows third party CDL skills test examiners previously authorized by the state to administer the CDL skills test, to administer the CDL knowledge test as well without completing a CDL knowledge test training course. This waiver expires either on December 31, 2020, or upon the revocation of the President’s Declaration of National Emergency concerning the COVID-19 public health emergency.

Contact an EPIC Transportation and Logistics team member for more information.

Insurance Products & Coverage

Ransomware Attacks are Rising, Healthcare is Top Target

The Department of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response (ASPR) released an update on November 17 regarding an imminent wave of ransomware attacks targeting the healthcare sector.

Sixty two providers have already been the victims of ransomware attacks this year and more than a dozen healthcare systems and hospitals have been hit within the last two months. Numerous federal institutions including CISA, HHS and the FBI consider the ongoing ransomware threat credible and persistent.

The most recent attacks have featured extremely short periods of time between the initial compromise event and activation of ransomware – sometimes as short as a few hours. This development marks an evolution in the nature of the ransomware attacks deployed against healthcare organizations. Previously, double extortion threats were made against organizations where cyber criminals remained on hijacked networks for days and even months, infiltrating entire systems through vulnerable connected devices before launching ransomware.

The news confirms information EPIC shared in a recent webinar, The Ransomware Threat Landscape in Healthcare: Ask the Experts. Led by EPIC National Practice Leader, Executive Risk and Cyber, Kelly Geary, the webinar offers insights into the current state of ransomware attacks in the healthcare sector from a cyber security, insurance and legal perspective.

Additional, relevant insights from the webinar include the following:

• Ransomware claims are up 239% from 2018-2019
• Total cost of claims is up 228% from 2018-2019
• Attacks on U.S. hospitals increased 71% between Sept. and Oct. 2020
• Targeted attacks at backups are on the rise
• Demands are increasingly significant and more customized to the targeted healthcare organization

Experts discussed that ransomware has evolved into a large scale event that results in business interruption for the targeted organization. When a hospital is attacked, EMR systems will go down in the middle of surgeries. Intellectual property and protected health information, including PHI and PII, are now the targeted data of cyber criminals.

Healthcare systems and hospitals are urged to prepare for impending attacks by performing crisis planning to determine vulnerabilities ahead of time and taking action to reduce them. Helpful steps include:

• Testing systems now to identify vulnerabilities and minimize them
• Ensuring remote work settings are secure by testing vulnerabilities
• Assessing existing cyber coverage to ensure it includes ransomware protection
• Identifying products that will enable the continuation of care should a ransomware attack disable critical systems needed to perform patient care
• Keeping backups secure in an offsite location that is disconnected from the main network
• Gaining familiarity with vendors including law firms, insurance agencies and cyber security vendors before an emergency occurs
• Recognizing antivirus software is only effective in preventing about 30% of ransomware attacks and exploring necessary solutions to protect the network

To listen to the full webinar, including questions about paying ransom in a ransomware attack, view the recorded session

For more information on this critical topic, contact an EPIC broker.

New COVID-19 Business Interruption Ruling Worries Insurers

Since the onset of the pandemic, business interruption litigation has been a hotly contested and ongoing issue. While still in its early stages, there are more than 1,200 lawsuits pending across the U.S. and Europe. Together, those suits seek to recover billions of dollars in losses through business interruption coverage.

On both sides of the Atlantic, insurers and policyholders have each notched wins and losses. Recently, a significant win may have been gained for policyholders in a North Carolina ruling. The judge denied the insurer’s motion for summary judgment in a lawsuit filed by 16 restaurant owners, granting the plaintiffs’ motion for partial summary judgment against the insurer.

The ruling is significant, as it favored the insureds, and the  meaning of “direct physical loss,” in the absence of a clear definition in the contract, was defined by the judge. Essentially, he found that coronavirus-related government shut down orders resulted in a direct physical loss for the insureds and therefore ruled they were entitled to payout under their business interruption policies. Importantly, the court determined that the phrase “direct physical loss” includes the loss of use or access to covered property even where that property has not been structurally altered. Such is the kind of loss caused by government shutdown orders as determined in this case.

While pending appeal, defense attorneys posit that this ruling could open the possibility for many more lawsuits to be filed under similar terms for other policyholders seeking payout for losses under their policies. The suit shows there are legal avenues for recovery of coronavirus-related business interruption losses.

The key takeaway from this case is that while insurers have for months argued that coronavirus-related business interruption insurance claims cannot possibly satisfy the direct physical loss or damage requirement for such coverage, a court in North Carolina has found otherwise, using nothing more than a plain language argument.

For more information about whether or not this development may impact coverage, contact an EPIC broker.

Pending Business Interruption Legislation Update

As a second wave of coronavirus infections engulfs the country, new citywide and even statewide shutdowns are happening or are on the horizon. If that happens, it is likely to bring on another round of business interruption litigation, with policyholders seeking payout for losses incurred as a result of the shutdowns from their business interruption policies.

In addition to a significant win in North Carolina, there are other notable wins in the policyholders’ column. In Studio 417 v. Cincinnati Insurance Co., a U.S. district judge in Missouri denied the insurer’s motion to dismiss a complaint filed by Studio 417. The court found that the presence of coronavirus in the salon chain’s Missouri locations were a physical substance that attached to and damaged their property. Therefore, rendering them unsafe and therefore presented a valid reason for the case to move forward.

In a later suit, Blue Springs Dental Care v. Owners Insurance, the same judge restated the same argument, finding reason for the plaintiff’s case to proceed. In another case, Optical Services USA/JCI v. Franklin Mutual Insurance, a New Jersey Superior Court judge rejected an insurer’s request to dismiss a case challenging their denial of a business interruption claim. In that decision, the court ruled that the plaintiff’s case should be allowed to continue, indicating that government shutdown orders result in a physical change to a covered property.

Two additional cases supporting this view include Urogynecology Specialist of Florida LLC v. Sentinel Insurance Co. Ltd., and Lombardi’s Inc. v. Indemnity Insurance Company of North America, where Florida and Texas courts, respectively, rejected insurers’ appeal to dismiss suits. The same is true of another ruling Independence Barbershop, LLC, individually and on behalf of all others similarly situated v. Twin City Fire Insurance Co., where a federal district court in Texas refused to dismiss a coronavirus business interruption lawsuit filed by a barber shop based on language in its virus exclusion that provides for up to 30 days of business interruption coverage.

Policyholders may also gain an advantage over insurers with pending legislation by state legislatures in New Jersey, Ohio, Massachusetts, New York, Louisiana, Pennsylvania, South Carolina, California, Michigan, Rhode Island and Puerto Rico. While specific legislation varies from one jurisdiction to the next, all attempt to provide small businesses with relief or the expectation of future relief for losses suffered as a result of the pandemic. Specifically, legislatures are introducing bills intended to require insurers to provide mandatory insurance coverage for business interruption caused by the virus.

The bills attempt to alter the terms of existing insurance contracts by requiring coverage regardless of whether the policy coverage is triggered. Mandatory coverage would likely raise questions of constitutionality based on the Contracts Clause, retroactivity and the deprivation of right of property.

For more information about how litigation and legislation may impact coverage, contact an EPIC broker.

EPL Market Spotlight

Immediately after the onset of the coronavirus pandemic, the Employment Practices Liability (EPL) market made swift adjustments in light of an environment rife with layoffs, furloughs, pay reduction and remote work arrangements. Anticipating a significant increase in employment litigation as a result of such measures, insurers increased rates and retentions, reduced capacity, tightened coverage terms and implemented an enhanced underwriting process.

On the heels of the aforementioned activity, a movement for racial justice impacted the market, pushing diversity and inclusion to the forefront of legislative discussions that could further affect the EPL market in meaningful ways.

A new law in California mandating publicly traded corporations headquartered in the state appoint directors from underrepresented communities to their boards is the first of its kind in the country. This law is setting the stage for a storm of employment claims in multiple categories, including: race and gender discrimination, harassment, retaliation, and pay equity.

As a result, EPL underwriters anticipate a significant rise in claims activity over the next 12 to 18 months. Insureds should prepare for the following changes, which may impact their EPL programs:

• Reduction in capacity, which for larger towers of EPL insurance could mean more smaller layers
• Premium increases, which vary greatly by industry class, but may affect even insureds who have not implemented furloughs or layoffs
• Retention increases for mass and class action claims for more challenging venues, high wage earners, and certain categories of employees
• Restrictive coverage in the form of biometric exclusions, coronavirus discrimination exclusions and parameters surrounding implementations of reductions in force as a prerequisite for coverage
• Enhanced underwriting requiring insureds to complete additional questionnaires

The procurement of EPL insurance remains a valuable risk transfer solution. Underwriters are more likely to present favorable terms to organizations able to demonstrate an awareness of the dynamic risk environment and a commitment to managing exposure.

For more information, contact an EPIC broker.

Presumptive Compensability Legislation

An ongoing issue affecting workers’ compensation is presumptive compensability legislation from states. Many have proposed workers’ compensation bills related to coronavirus, including an expansion of coverage for either frontline, essential or all workers. Some states have issued executive orders, bulletins, emergency rules and directives on workers’ compensation coverage for certain workers. It is a dynamic situation that warrants monitoring by employers.

Most recently, a Texas lawmaker introduced a bill that would make it easier for nurses who become infected with the coronavirus to receive workers’ compensation benefits. H.B. 396 would create a presumption for nurses who acquired the virus on or after February 1, 2020. To be eligible, nurses would have had to treat patients with the virus or performed duties that required them to be in contact with patients infected with coronavirus. Another Texas representative introduced H.B. 243, which would create a cost-of-living increase for workers’ compensation death benefits. If the bills become law, they would be enforced beginning September 1, 2021.

Ogletree Deakins has assembled a searchable table to track which states have implemented or proposed amendments to state workers’ compensation statutes. The table also addresses workers’ compensation benefits for health care workers and first responders. Access the table

For more information, contact an EPIC team member.

News of Note

The passage of another two weeks has brought forth more developments across the insurance world. Here is a rundown of recent news stories of interest.

• Supreme court case looms as insurers battle firms over COVID cover, The Guardian, Nov. 16
• Local baseball league sues insurance companies over season batted down by COVID-19, Observer-Reporter, Nov. 12
• S. P&C commercial insurance sector outlook for 2021 remains stable amid rising pricing, Moody’s, Nov. 12
• Fired Amazon worker files discrimination lawsuit over pandemic conditions, Reuters, Nov. 12
• 4 Critical COVID-19 risks to the aviation sector, Risk & Insurance, Nov. 11
• Cigna sued over refusing COVID-19 testing coverage, Business Insurance, Nov. 10
• Three Long Island health care facilities cited for alleged workforce violations, Newsday, Nov. 8

HR & Employee Benefits Insights

OSHA Issues Respiratory Protection Guidance for Employers of LTC Facility Workers

The Occupational Safety and Health Administration (OSHA) issued respiration protection guidance for people working in nursing homes, assisted living and other long-term care (LTC) facilities (LTC) from occupational exposure to coronavirus. The action aims to ensure availability of respirators continues throughout the pandemic.

Everyone in healthcare facilities, even those not presenting symptoms of the virus, are encouraged to wear cloth face coverings, facemasks and FDA-cleared surgical masks at all times while inside an LTC, including when in breakrooms and other common spaces.

Healthcare providers in close contact with an LTC resident suspected of or confirmed to have a coronavirus infection must use a NIOSH-approved N95 filtering facepiece respirator or equivalent or higher-level respirator.

OSHA encourages employers to reassess their engineering and administrative controls including ventilation and physical distancing, sanitizing and hygiene practices, which are preferred to personal protective equipment such as masks.

Whenever respirators are required, employers must implement a written worksite-specific respiratory protection program (RPP), including medical evaluation, fit testing, training and other elements, as specified in OSHA’s Respiratory Protection standard (29 CFR 1910.134).

For Respiratory Protection Training Videos, visit OSHA’s website

For additional healthcare respiratory protection resources from NIOSH, visit the CDC’s website

Contact an EPIC team member for more information.

Oregon OSHA Adopts Temporary Coronavirus Rule

The Oregon Occupational Safety and Health Administration (OSHA) has adopted a temporary rule that combats the spread of coronavirus in all workplaces by requiring employers to carry out a comprehensive set of risk-reducing measures. The move is in line with actions taken by Governor Kate Brown, who issued sweeping new lockdowns on November 13 in an effort to combat a surge of coronavirus cases in the state. Oregon went into a partial lockdown for two weeks beginning November 18, with gyms, museums, pools, entertainment venues, bars and restaurants closed and social gatherings limited to six people or less.

The OSHA rule will take effect November 16, with certain parts phased in, and is expected to remain in effect until May 4, 2021. It is a continuation of the guidance produced by the Oregon Health Authority and enforced in the workplace by Oregon OSHA, including physical distancing, use of face coverings, and sanitation.

The rule is intended to further improve the current structure for reducing risks in the workplace by requiring several measures many employers have voluntarily implemented. For example, it requires employers to notify employees of a workplace infection and provide training to workers on how to reduce risks. Likewise, employers must formally assess the risk of exposure, develop infection control plans, and address indoor air quality within their current capability.

Following adoption of its temporary COVID-19 rule for all workplaces, Oregon OSHA continues to pursue permanent rulemaking that would provide a structure for responding to potential future disease outbreaks.

More information is available on OSHA’s infectious disease rulemaking page.

Contact an EPIC team member for more information.

OSHA Issues Another $500,000 in Coronavirus Citations

During a seven-day period in late October, the U.S. Occupational Safety and Health Administration (OSHA) conducted 35 inspections that yielded coronavirus-related citations totaling $471,337.

Since the beginning of the coronavirus pandemic, OSHA has issued 179 citations that have resulted in proposed penalties totaling nearly $2.5 million. The most common citations charge employers with failure to do the following:

• Implement a written respiratory protection program
• Provide a medical evaluation, respirator fit test, training on the proper use of a respirator and personal protective equipment
• Report an injury, illness or fatality
• Record an injury or illness on OSHA recordkeeping forms
• Comply with the General Duty Clause of the Occupational Safety and Health Act of 1970

Citations from OSHA’s coronavirus-related inspections can be searched for and accessed on the Department of Labor’s website.

A full list of what standards were cited for each business, and the inspection number, can be found on OSHA’s website.

Contact an EPIC team member for more information.

OSHA 300 Recordkeeping Webinars Announced

EPIC is offering a free, two-part webinar series covering OSHA recordkeeping requirements. These OSHA 300 webinar refresher courses ensure participants know and are fulfilling all OSHA recordkeeping obligations.

Part one will be offered on December 15 and January 12, 2021 at 9:30 AM CST, and will provide an overview of recordkeeping requirements, including: applicability; filling out forms 300, 300A and 301; definition of first aid, recordable, restricted duty, day away from work and death; counting days; and posting and submittal of recordkeeping information.

Part two will be offered on December 17 and January 14, 2021 at 9:30 AM CST, and will cover common errors and misunderstandings, including: failure to maintain forms by establishment; over and under reporting; inaccurate day counts; inaccurate man hours; failure to post or report in a timely fashion; and improper form 301 signatory.

For more information about the event, visit epicbrokers.com/insights/osha-300-recordkeeping-webinar/ or contact Chuck Simpson at .

National Safety Council Report Says Most Employers are Keeping Workers Safe

A new report out from the National Safety Council (NSC) details the results of a recent survey on what employers are doing to protect their workers against exposure to coronavirus.

The NSC launched the national survey in July, targeting safety and health decision-makers at organizations with at least 250 employees across several different industries.

Respondents were asked whether they had implemented more than 20 recommended safety practices related to coronavirus. They were also asked to assess the impact of those measures on productivity and virus-related outcomes, including confirmed cases.

Safety practices businesses largely adhered to included health screenings, employee self-reporting of symptoms, contact tracing, temperature screenings at workplace entry and restricted travel for non-employees onsite.

Across nearly all industries, the NSC found employers are:

• Investing in handwashing and hand-sanitizing stations throughout their facilities
• Implementing procedures to increase the frequency of cleaning and sanitization
• Providing proper personal protective equipment, including face coverings and face shields
• Facilitating physical distancing by enabling nonessential workers to work remotely, and installing signage and other visual reminders of proper traffic flow and spacing for workers still reporting to facilities

On average, the survey found organizations spent $5,208 per employee on various safety practices – from making remote work possible to providing PPE and hand sanitizer.

In the midst of a challenging time, the report is an encouraging reminder of the positive difference employers can make in the lives of their workers and the country in advocating for and actively working to achieve workplace safety.

Insights From Across the Firm

EPIC thought leaders have written numerous articles on matters relating to coronavirus, all of which are available on EPIC’s website. The most recent articles include:

• Americans are Lonely, Nov. 16
• How to Prepare for AB 685, Nov. 16

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. 

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