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The Coronavirus Checklist: Safeguarding Your Business from COVID-19

Sentinel’s Jim McCluskey (Partner, Client Executive) is an industry leader in the area of complex risk.

Now is the time for North Carolina businesses to begin leading their way through the coronavirus crisis, starting with effective employee communication. Sentinel’s best piece of advice mirrors that of the CDC and other emergency management agencies: Actively encourage sick employees to stay home.

In fact, our top five recommendations for mitigating the potentially damaging effects of coronavirus are simple, straightforward tips for communicating with employees.

Top 5 Ways to Protect Your Business From Coronavirus

  1. Encourage sick employees to stay home.
  2. Review absenteeism policies to ensure employees do not feel they must come to work if sick.
  3. Communicate the importance of good hand hygiene and encourage employees and patrons to protect themselves from the spread of illness.
  4. Review company policies and procedures for remote or teleworking where possible.
  5. Cross-train employees for key functions so that daily schedules can continue relatively uninterrupted by potential employee absences.

Beyond good communication lies the need for a comprehensive business readiness and response plan; one that for some companies will pose more complex challenges. For instance, a recommendation to limit and restrict employee travel may require a shift in your organization’s operational objectives and deadlines. Others may impact short term revenue goals. But remember: the best risk management strategy is one that affects the best long-term outcome. Where coronavirus is concerned, an ounce of prevention today could well be worth a pound of cure tomorrow.

To help our clients and partners contend with the challenges posed by COVID-19, Sentinel has prepared the following risk management and insurance checklist to serve as a guide for prevention, preparation, and best practices. 

 Coronavirus Checklist: Risk Management Planning

  1. Have a plan! Modify existing business continuity and crisis management plans with a focus on communicable diseases.
  2. Involve employees in the development and review of both the business continuity and crisis management plan. Keep the plan flexible to account for changes to the coronavirus threat.
  3. Communicate the plan’s human resource policies to employees, including any changes to responsibilities, work hours, and pay.
  4. Ensure that your plan identifies key areas of risk and vulnerability (i.e. supply chain, employee travel, customers, vendors, lost time, etc.)
  5. Proactively communicate that any employee with a fever and respiratory symptoms stay home until they are fever and symptom free for more than 24 hours, per the CDCs guidelines.
  6. Put the plans to the test. Conduct drills or related exercises to expose gaps or weaknesses.
  7. Share your crisis management and business continuity plan with your Sentinel advisor.
  8. Update your crisis management plan so that you can ensure effective communication internally and externally should key personnel become ill.
  9. Distribute the Pandemic Flu Checklist from the CDC to management personnel. https://www.cdc.gov/nonpharmaceutical-interventions/pdf/pan-flu-checklist-workplace-administrators-item1.pdf 

Coronavirus Checklist: Best Practices in Human Resources

  1. Emphasize and extend office sanitation and cleaning procedures. Wipe down surfaces and equipment with disinfectant frequently and supply employees with disinfecting wipes.
  2. Ensure that sick leave policies are flexible and consistent with public health guidelines, and that employees are aware of these policies. Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies
  3. Do not require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
  4. Employers should maintain flexible policies that permit employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.
  5. To prevent the spread of the disease to healthy employees, employers should allow employees to self-quarantine at home in situations where an employee believes they have been exposed to coronavirus from close contact with someone infected in the home; even if they are not yet experiencing symptoms themselves.
  6. Review business travel with intention to:
    • Avoid nonessential travel altogether
    • Consider limiting even essential travel if the area in question has known coronavirus exposure
    • Consider travel bans to and from: China, Italy, South Korea, and Japan. Check the CDC’s website daily to update this list.

  

Coronavirus Checklist: Insurance Coverage

Most insurance policies have different terms and conditions, so coverage will vary from one business to another. It is also important to recognize that the governing jurisdiction will often further interpret coverage differently.

For example, workers’ compensation coverage requires the claim to stem from injury or illness occurring ‘in the course and scope of employment.’ Each state has its own test to determine what constitutes the course and scope of employment.

It is important that you review your insurance policies with your risk advisor and broker to determine coverage. Be sure to consider coverage extensions and sublimits available through crisis management. Consider the following coverage criteria and scenarios:

Workers’ Compensation. Did the employee contract coronavirus during the course and scope of employment? For example, does their job require them to be exposed to people who are infected, such as medical staff? If so, coverage is likely. Or, was the exposure incidental, such as from a coworker? In that case, coverage is unlikely.

Employer Liability. Was the illness or disease a result of exposure from employment and could it have been prevented? Or, was the illness caused by an ‘ordinary disease’ where it could have been contracted anywhere? Regardless, the employee would need to prove negligence and a clear connection with work.

Business Interruption and Contingent Business Income. Policies often require physical loss or damage. Unless there is reason to believe that the virus requires additional cleaning to the property, where there may be coverage, you need to fully understand the policy exclusions, especially specific exclusions related to pathogens (virus and bacteria). Sentinel can help you determine if there is the potential for supplemental coverage or coverage extensions that apply (i.e. governmental intervention, supply chain, etc.). Again, it is important to understand if and how any exclusions may apply. However, beware of pathogen-based policy exclusions.

General Liability. Coverage is provided for bodily injury and/or property damage claims resulting from your business. Coverage is also provided for defense for covered claims. There is potential for negligence to be determined, with regard to visitors and guests to your business either being infected with coronavirus, or transmitting it to employees.

Events. For businesses with planned events, (training, conferences, expos, fairs, marketing and promotions, sporting events, golf outings, etc.), check the policy’s terms and conditions to cancel. Event cancellation policies are often written with very specific terms and conditions.

Cargo (including Stock Throughput). Seven of the world’s 10 largest shipping container ports are located in China. Vessel calls at these ports is down 20 percent, and that number is expected to grow significantly. Cargo, similar to property, requires physical loss or damage, making coverage unlikely. If the vessel were to be placed in quarantine (hence storage) and shipments delayed, individual conveyance contracts and policies will need to be evaluated. It is important to recognize that trip transit coverage may need to be extended if there is a delay in the journey.

Pollution & Environmental. Coverage under these policies will vary significantly and must be reviewed carefully. Coverage is possible to a certain extent, depending on the facts of the claim.

Business Travel Accident. These policies will vary, but typically may offer coverage if the employee contracts coronavirus and has to cancel a flight, or if the traveler is placed in quarantine. As for the illness to the traveler, coverage will depend on the actual policy, but typically, would cover the traveler. However, you should evaluate to what extent other insurance policies may cover the illness.

Directors and Officers. Coverage is likely for claims and defense costs stemming from stock value diminution attributed to failure to plan for lost revenue.

Employment Practices (including 3rd Party). Coverage should apply to claims filed due to allegations of discrimination against employees, contractors or vendors of foreign nationality or origin. It is also prudent to review any contracts, especially with foreign nationals, and to what extent the business may have obligations to those individuals.

Contract Completion. Evaluate contracts and bonds, paying particular attention to the Force Majure Clause.

Employee Health Plans.

Medical

  • Long-term impact due to extended hospitalization
  • Potential increase of medical utilization

Disability

  • Extended absence
  • Short term vs. long-term will depend on severity of illness

Questions? Sentinel is here to help.

Call your Sentinel advisor for help navigating challenges to your organization posed by coronavirus.

Check the Sentinel website often, as we will provide risk management and insurance updates frequently as they become available: http://sentinelra.info/blog.

And visit the CDC website daily for updates and the latest news and guidelines on the outbreak: https://www.cdc.gov/.