Vaccine mandates can result in a surge in labor follow claims – company insurance

Persistent uncertainty about COVID-19 vaccine mandates could lead to an increase in discrimination and retaliation claims against employers over the next year, according to liability insurance experts for labor practices.

However, what impact this will have on liability insurance for employment practices remains to be seen.

In the midst of a patchwork of federal, state, local and employer vaccination guidelines, employee accommodation requests and other liability insurance claims in employment practice are a problem. Litigation over the validity of federal mandates is expected to reach the US Supreme Court.

On December 17, the 6th US Court of Appeals in Cincinnati reinstated the Biden government's vaccination mandate for US private companies with 100 or more employees. The mandate, which includes around 84 million workers, was suspended after a series of legal challenges.

It's a "fluid situation" and the impact on liability insurance and the pricing of employment practices has not yet closed, said Bryan Lorenz, Los Angeles-based national account director for management liability practice at Risk Strategies Co.

Employers do what they can to ensure the safety of employees, "but the requirement of vaccines leads to a different category," said Lorenz.

"I don't think the plaintiffs' bar associations will win many cases if staff say, 'I was fired from my job for not getting the vaccine.' If a discriminatory component penetrates the lawsuit, then I can see how the plaintiffs jump on it and take some of these cases, ”he said.

The biggest concern is the uncertainty surrounding vaccine mandates, said Kimberly Forrester, partner at Clyde & Co. LLP in San Francisco. "The enforceability of them remains pending," and vaccine guidelines vary by region and by industry, she said.

"We expect entitlements to increase as different employers introduce their policies, and whatever they are, they adversely affect some employees," said Ms. Forrester.

Disability and religious discrimination claims, particularly from workers requesting an exception from vaccination guidelines, as well as discrimination claims in general, are expected to increase, she said.

"When employees return to their jobs, some may claim they haven't lost a promotion or any chance because of their vaccination status," said Ms. Forrester.

Employment practices liability insurers are overseeing the problem, said Joni Mason, senior vice president, national executive and professional risk solutions claims practice leader, at USI Insurance Services LLC in New York.

"Our customers have seen a surge in requests for accommodation for their vaccine mandate, so insurers are seeing some of those claims come true," she said.

However, many of the inquiries are in the form of employee letters or legal letters. "It's not necessarily a lawsuit," said Ms. Mason.

Over the past six months there has been a steady increase in COVID-19-related lawsuits in general, not just those related to vaccine mandates, said Marie-France Gelot, senior vice president, Insurance and Claims Counsel in New York at Lockton Cos . . Inc.

"We expect and insurers expect that the number of claims will increase over the course of the next year," said Ms. Gelot.

Employers facing a lawsuit will ask, "Do I have insurance for this?" Said Micah Skidmore, partner at Haynes and Boone LLP in Dallas.

Employment Practices Liability Insurance is specific to various wrongful acts listed in a policy, including discrimination, wrongful dismissal, wrongful omission or denial of employment, and improper discipline, said Mr Skidmore.

"These are some examples of what you might see implied when you have a claim," he said.

Eden Stark, vice president of financial lines at QBE North America in New York, said the insurer had seen an overall increase in liability claims related to employment practices due to COVID-19, but "had no significant impact on the severity of the damage ".

The formulations of the policy have not changed significantly, she said. “It would be too broad to expressly exclude COVID claims. We didn't see any specific responses to COVID, ”she said.

Jeff Hirsch, Head of Claims at FounderShield LLC, a unit of BRP Group Inc. in New York, said some insurers have added mandatory notices restricting coverage for COVID-19-related claims.

Such steps are common in industries prone to COVID-19 claims, such as companies that manufacture or distribute personal protective equipment or companies that provide services and workers in the health sector, he said.

“The EPL premium rates have been on an upward curve and that curve has increased by between 5% and 10% in response to the pandemic. … It's safe to say that there is some factor in increasing the rate of vaccine mandates, ”said Mr. Hirsch.

Prior to the pandemic, overall work demands had increased, said Michael D’Ambrise, senior vice president at Beecher Carlson Insurance Services LLC, a unit of Brown & Brown Inc. in New York.

COVID-19-related claims "including and specifically (related to) vaccines" are also growing, he said. "These things could have an impact on the rate increase," he said.

Comments are closed.