The latest–and for many businesses, the mostsignificant–fallout to the coronavirus pandemic is the businessinterruption it's causing.

It is still unclear whether employers will be held liable forworkers' compensation claims associated withCOVID-19. At the same time, supply chain issues are alreadythreatening business interruption. Find out what you can do toprepare right now for tomorrow's unknown.

It is no longer if COVID-19 will become a business issue, buthow to prevent it from becoming a significant one, and whichaspects of an organization will be most affected. From worker'scompensation claims to supply chain interruption, business havemore questions than there are answers. Here, we attempt to answersome.

When is COVID-19 a worker's compensation claim?

Generally, when an employee catches the flu from someone atwork, it is not covered under Workers Compensation insurance. Thoseclaims have been found not to be compensable and were denied.However, in the case of COVID-19, the answer is not very clear.

Instead, if an employee tests positive for COVID-19 – regardlessof how they caught the virus – and/or if an employee causes thevirus to spread among your staff or patients, your organizationneeds to file a worker's compensation (WC) claim on behalf of allinfected workers.

In order for the claim to be covered, the employee(s) will needto prove that he/she was not only infected with the virus viaanother employee, but the only way they were exposed COVID-19 wasthrough that contact. It cannot be assumed that the insurancecompany will pay out WC benefits for COVID-19 exposure. There willbe an investigation, and employers who have taken steps to limitthe exposure to their employees will be working with theirinsurance company to determine if a claim is compensable. Thecontraction has to be within the "course and scope ofemployment."

WC policies typically provide benefits for lost time, permanentdisability, medical expenses, and even death benefits when aninjury is found to be caused by a work exposure. Reach out to yourbroker today to review your WC policy details ahead of any issuesto determine the best course of action should residents oremployees begin to show symptoms or claim they may have beenexposed to the virus at work.

Are business interruption/supply chain issues due to COVID-19covered?

The latest–and for many businesses, the most significant–falloutto the coronavirus pandemic is the business interruption it'scausing. For many senior facility owners and operators, theepidemic has affected their supply chain, i.e. organizations can nolonger ship or receive products necessary to their work, or it hascaused other significant personnel or materials delays.

A variety of issues related to coronavirus can cause businessissues. From the inability to source materials necessary for yourbusiness to shortage of critical care supplies or even remoteworking complications. Unfortunately, Business interruption (BI)policies don't cover pandemics. Instead, they require a physicaltrigger like a degree of damage to the insured's property forcoverage to kick in.

When endorsed into a policy, contingent business interruptioncoverage (CBI) may apply to losses due to the suspension of theinsured's operations caused by direct physical loss of or damage toa dependent property, such as the premises of a key supplier,contractor or customer. There does not need to be damage to theinsured's property to qualify for CBI coverage. Rather, the insuredwould have to show covered property damage at the dependentproperty location and at this point, contamination may not beenough to satisfy those requirements.

It is critical to talk to an insurance broker about your BI andCBI policy coverage to find out what parameters, limits andexclusions for virus and pandemics are in place and what to lookout for ahead of a potential claim.

What employers can do right now

So, you've closed your non-essential offices and moved mostemployees to remote work. Now is the time to prepare your internalsystems and policies to further minimize liability. Consider thefollowing best practices:

1. Author an emergency preparedness plan. Ifyou don't already have one, name a working group of employees fromacross your organization to create a business continuity, emergencypreparedness and even pandemic reaction plan. Consider businessinterruption issues specific to your business and location andestablish procedures that can be enacted on a moment's notice.

2. Report claims immediately. Time is of theessence. Exposure and potential claims, whether WC or BI, must besubmitted as soon as possible. This will allow for a thorough andefficient review of the case and all coverage scenarios. Like anyother local state of emergency, as the COVID-19 pandemic spreads,claims have the potential to get backed up.

3. Review policies. Conduct a careful analysisof your current policies with your broker, both primary and excess.This analysis will reveal whether an event like this is covered byyour insuring agreements, and which exclusions apply. Many factorswill determine if a claim will be covered, including the type ofloss, the type of coverage and the terms and conditions, includingexclusions, for each policy. Understanding your coverage parametersup front will eliminate the guessing game.

4. Beware computer hackers. Cyberthieves are at work, and with employees working at home connectingto your network, there is the potential for a breach. Employeesshould be reminded to take precautions and beware of suspiciousemails with attached links that if clicked, may allow your networkto be breached.

How COVID-19 claims will fully play out over the coming monthsis unknown. What we do know is that it's very likely there will bemany, as every business has been affected by coronavirus. It's timeto prepare for business interruption and employee WC issuesnow.

David Chmiel, SVP, is the national directorof claims for Hub International. ThomasSteinbrenner is a senior vice president at HubInternational.

Related: 

• States grapple with compensation for families offront-line workers killed by COVID-19
• The COVID-19 pandemic: key employee benefits andcompensation issues to consider
• Expanding paid-leave regulations make workers' compmore complicated