Gallagher has warned of rising liability risks for employers as easing coronavirus restrictions allow staff to return to the workplace.
Claims under employment practices liability (EPL) insurance could be triggered by an employee becoming infected with COVID-19 or as a result of undue stress created by the poor or ineffective management of the virus response, it says.
Businesses with variable risk management procedures for different teams and locations could trigger discrimination issues, while loss associated with enforced self-isolation could also give rise to a claim.
Breach of privacy and emotional distress are other areas of risk, Gallagher says in a Middle Market Business Insurance Update which focuses on COVID-19 considerations.
“Most EPL policies contain exclusions for loss related to bodily injury however there is generally coverage for claims relating to mental anguish or emotional distress alleging an EPL breach,” it says.
Directors’ and officers’ insurance is another area where the outbreak of the virus is increasing risks for companies in a range of areas.
Gallagher highlights in a separate report that larger corporates will need to ensure they are meeting Australian Securities Exchange continuous disclosure requirements.
Firms affected by stoppages and supply chain disruptions will need to be aware of ASX reporting obligations, while they will also need to be mindful of regulatory changes and governance expectations, it says.
“It is likely that legislative and regulatory changes will shape the post-COVID-19 environment and increased scrutiny will be placed on organisations to understand and implement any changes,” it says.
D&O premiums have already soared in recent years amid increased litigation-funded class actions and as insurers have reduced their appetite.
“Outside of the COVID-19 specific challenges, the insurance market was already experiencing structural change,” Gallagher’s May Business Insurance & Risk Market Update says.
Prime Minister Scott Morrison on Friday outlined a three-step plan for easing coronavirus-related restrictions. The proposals will allow more businesses to gradually reopen and could see many employees back in their workplaces in the next couple of months.
“It’s our aspiration as agreed among premiers and chief ministers and myself that in July, we will have moved through these three steps across the country,” Mr Morrison said.
Blog Submission: Peter Sellwood
PALTD InsureRight – Insurance & Risk Management
Contact us today to speak to our insurance specialists for more information.