Self-insured employers facing virus litigation threat may opt for safety

Self-insured employers facing the threat of COVID-19-related workplace safety litigation have a safety net: accept a workers compensation claim for an employee who tests positive and suffers a minor illness as a result, according to legal experts. 

“Liability is scary because there are no caps,” said Mike Fish, Birmingham, Alabama-based founding member of the workers compensation defense law firm Fish Nelson & Holden LLC and past president of the National Workers Compensation Defense Network, an alliance of comp defense attorneys that monitor legislation.

“Employers weighing the risk may choose to have the exclusivity doctrine,” he said. “Liability lawsuits are getting filed everywhere.”

Accepting claims at the onset may be “possible” for self-insured employers that don’t have to get clearance from insurers, said Adam Brackemyre, Alexandria, Virginia-based vice president of state government relations for the Self-Insurance Institute of America Inc., an association that promotes self-insurance and the captive insurance industry.

Employers “are not seeing as many COVID claims as they might have expected,” he said. “All of these people are testing positive, but there wasn’t much in terms of disability. It’s a severe flu at worst” for some employees. 

“Some (employers) are definitely crunching the numbers, and some may choose to process claims as workers comp because it may be cheaper to pay the benefit than to contest it,” Mr. Brackemyre said. 

Under a comp scheme, an employer would pay wages — typically about two-thirds of salary — and medical costs. 

Trent Oubre, Baton Rouge-based legislative committee chair for the Louisiana Association of Self Insured Employers and partner at the firm Breazeale, Sachse & Wilson LLP, agrees that workers comp could be the way to go for some employers facing smaller, less complicated COVID-19-related claims.

“If they do, they need to proceed with caution,” he said. However, the alternative — litigation — could be more risky. 

“It behooves (employers) to evaluate their position now on how they are going to respond to these claims,” Mr. Oubre said. “The safest route may be to keep them in the comp arena.”