Authored by HUB International
A class action lawsuit against several hospitality concerns on the Las Vegas Strip is one of three recently filed alleging employer willful misconduct in allowing unsafe work conditions related to COVID-19.
In normal times, claims under Part B, or the employers’ liability section of workers’ compensation policies, are unusual as it’s difficult and complex to adjudicate “serious and willful” employer misconduct. The pandemic, however, has led to numerous such claims across various industries including hospitality – and the workers’ compensation insurance marketplace has gotten more volatile in their wake. Although typically a rare claim – and award, it has been the basis of a growing number of lawsuits against employers in the restaurant and food service industry related to their COVID-19 safety measures.
The upshot is a red flag of warning to the hospitality industry to be prepared on two fronts moving forward:
1. Take a hard look at your workers’ compensation strategy.
At the start of 2020, workers’ compensation was a positive light in a dim environment for most insurance lines as the market hardened. But today, COVID-19 and related issues like high unemployment have pushed it to the head of the pack over concerns around rising rates and escalating claim frequency. And employers’ liability is the critical emerging risk for the times. Consult with your broker about adding it as an underlying policy to your umbrella/excess insurance at limits that are appropriate for the circumstances.
2. Employing the best practices will offer the best protection.
Hospitality employers will reduce their liability for COVID-19 related employer willful misconduct under their workers’ compensation policies if they have done the job of pandemic planning. That starts with following basic OSHA guidelines for ensuring a safe workplace, and then adding the CDC guidelines for COVID-19. It means implementing safe work practices, posting the right notices, making sure people are trained in safety measures, following through on policies and procedures, and documenting every action in support of a safe workplace. Start with worker safety, but the bigger need for the times is to refocus more broadly on strategic risk management for the enterprise.
Please contact me directly if this is something you might be interested in learning more about. Leading global insurance brokerage, HUB International, has dedicated experts who can answer any of your questions.