March 6, 2020
Earlier this week Sedgwick issued a service continuity update as assurance of our commitment to supporting clients and their employees and customers through any adverse effects of the coronavirus (COVID-19). We would like to share some additional information with our casualty customers regarding handling recommendations for potential workers’ compensation and general liability claims, as well as our internal preparations so we can best support you.
Sedgwick business continuity planning
We have enacted our comprehensive business continuity plan and have a global task force engaged on all aspects of this public health issue. Key elements of the plan that could impact our casualty clients include:
Office backup plans: Should one or more of our servicing offices become negatively impacted by the outbreak, alternative office arrangements are in place.
Remote work options: Sedgwick colleagues who need to remain at home will be able to remotely access business-critical applications and phone systems.
Functional priorities: In the event of significant Sedgwick colleague-level impacts, priority will be placed on tasks associated with critical claim decisions and settlement/benefit payments.
Additionally, we have provided our colleagues with best practice guidelines for handling casualty claims involving coronavirus.
Workers’ compensation best practice guidelines
All U.S. states have some form of workers’ compensation coverage for occupational diseases. While workers’ compensation laws, regulations and case law vary by state, as a general rule, in order for a disease like coronavirus to be compensable, workers’ compensation statutes require that it:
Arise out of and in the course of employment.
Be proven to be the result of a workplace exposure.
Be due to employment that places the employee at a substantially greater risk of contracting the disease or condition than the risk experienced by the general public.
Sedgwick colleagues have been instructed that, if they receive a workers’ compensation claim alleging the coronavirus, they should immediately notify their operations management team, the relevant client services director, the employer and the carrier (if the claim is insured). Additionally, our workers’ compensation practice group will be notified to ensure appropriate tracking, reporting and evaluation.
Sedgwick will determine compensability for each claim based on the facts established during a good-faith investigation and the law of the jurisdiction. The investigation will follow our established practice of contact with the employee, employer and treating physician. Colleagues have been provided with additional guidance specific to coronavirus by our managed care and workers’ compensation practice leads to aid in compensability determinations.
General liability and employers’ liability best practice guidelines
General liability typically provides protection against financial loss due to claims of liability for damages and/or injury occurring during the course of business.
The possible exposure for this line regarding coronavirus will be allegations of negligence in failing to prevent transmission of the virus. Premises liability—which is typically included under general liability—may also be alleged. For example, a customer or business invitee may present a claim alleging they were exposed to the coronavirus due to improper decontamination of a business location where a person diagnosed with the coronavirus was known to have been. Another example of a claim that may be filed is negligent disposal of contaminated medical waste.
Employers’ liability is part-two of a standard workers’ compensation policy and protects the employer against claims of injury due to negligence of the employer. In most states, the statutory workers’ compensation benefits are the sole remedy available to an injured employee, and a claim under the employers’ liability portion of a workers’ compensation policy is rare. However, in the case of an employee diagnosed with the coronavirus arising out of and in the course of their employment, the family member(s) of that employee may assert claims alleging consequential bodily injury, the loss of consortium and emotional damages.
Sedgwick colleagues have been instructed that, if they receive a general liability or employers’ liability alleging injury or damages due to coronavirus, they should immediately notify their operations management team, the relevant client services director, the client and the carrier (if the claim is insured). Additionally, our general liability practice group will be notified to ensure appropriate tracking, reporting and evaluation.
Recognizing that preparation for and responding to allegations will be critical for our clients as they relate to coverage, we will work with our carrier partners and self-insured clients to review, evaluate, and determine coverage for these claims. A component of that discussion will involve determining the applicability of any exclusions.
Sedgwick will make a determination of coverage for each claim based on the facts established during a good-faith investigation. In addition to the standard interview questions, examiners have been provided with a list of additional questions specific to the coronavirus to address with the employer/client, as well as the claimant (or their attorney, if represented).
Additional insights from our experts on the coronavirus are available on the Sedgwick website. Other helpful coronavirus information resources include:
Sedgwick continues to closely monitor the situation, and we will keep you apprised of any changes that may affect you or your employees and customers. If you have any particular concerns regarding your program, please contact your Sedgwick client services representative. Thank you for your continued partnership.