Probable Issue: Covid-19 Liability Protections

COVID-related liability actions are occurring under workers’ compensation, general liability, business interruption and other common insurance coverage areas. Image credit: Getty Images

Date Posted: September 14, 2021

Michigan Farm Bureau

After H1-N1 and the SARS virus, the international and American insurance industries developed exclusions for viruses and other communicable illnesses. Current COVID-related liability actions are occurring under workers’ compensation, general liability, business interruption and other common insurance coverage areas. In many cases, it can be very difficult to determine responsibility and appropriate levels of care related to COVID-19. For example, understanding whether a worker contracted COVID-19 in the workplace or from another setting is often nearly impossible. Legislation is being considered to create certainty for both businesses and employees in restarting the economy. Many insurance litigation actions will determine if "direct physical loss or damage" can be proven.

Liability issues rooted in the pandemic are very diverse; other actions include: wrongful termination; failure to provide reasonable accommodation; mishandling of employer response planning; failure to both require masks and allow medical exceptions from their use; civil rights (application to only protected classes) and a variety of discriminatory actions related to retaliation; return to work prohibition unless vaccinated; class actions regarding in-person education; nursing home fatality rates; breach of contract (seller/purchaser, employment contract); and a variety of fiduciary requirements regarding boards of directors and financial management.

Thoughts to Consider

Do the recent Michigan laws (listed below in additional resources) cover liability risks for your operations related to employment and business practices?
Should employers be held responsible for lost wages or unemployment insurance costs when the state or federal government prevents in-person work?
Should businesses making a good-faith effort to follow current guidance, orders or standards be subject to fines or lawsuits from agencies, employees or customers?
Should failure to follow all requirements lead to suspension of any/all business-related licensing?
Who should be held liable for breach of contract due to COVID-19 related issues including the lack of workers?