Litigation as a result of COVID

Written by: Michael Tonsetic

Yeah yeah…I know you’re thinking: WTH is this guy rambling on about again? And no, I do not pretend to be Fauci or set CDC guidelines here. What I’m talking about, and what I ALWAYS seem to talk about, is insurance.

From Day 1, I’ve always said I believe there will be (3) waves of litigation as a result of COVID:

1. Businesses (especially Small Business) suing their Insurance Companies
2. Customers suing Businesses
3. Employees suing their Employers

Until recently, I thought this was pretty cut & dry, until in the industry we started seeing spikes in EPLI claims, and I’ll get to that acronym in just a second. Prior to, all the litigation in the 3^rd wave was related to Workers Comp. Employees suing their employers after contracting COVID, and mainly over ‘unsafe working conditions’. However, the mass furloughs and layoffs started to write a different narrative.

Employment Practices Liability Insurance

An obvious disgruntled workforce began fighting back against employers claiming (pun intended) i.e. discrimination, unlawful termination, harassment, etc. All of these types of scenarios (claims) are commonly insured against via Employment Practices Liability Insurance (EPLI), of which a lot of small businesses don’t even carry for a myriad of explanations of which I cannot get behind.

Now, I’m going to be brutally honest here and I don’t care if it’s an unpopular opinion. The reality is, one of the biggest mistakes small businesses make is buying into the illusion that they know their employees as well as they might know their own spouse or child. Well, per the current divorce rate in this country, and even more so the backlog COVID has created, again I pose the question: How well do you really know anyone anymore…?

This is why we have insurance. To create certainty in the face of uncertainty, the certainty being the intangible coverage in an insurance policy. Is it a certainty you will face these issues? It’s uncertain still, but keep in mind most of these waves are still ripples in the middle of the ocean slowly building up steam and sure enough headed to shore.

Now that I have your attention, fill your sandbags and stack your levy high, for uncertainty can be an ambiguous bully.