In early summer 2021, organizations were starting to put their long-awaited “post-COVID-19” office-reopening plans into action. The Delta variant has derailed that strategy for many, at least temporarily, although some businesses continue to move forward with their reopening plans. Whether their return-to-work plans continue or are paused, employers will eventually face unprecedented challenges and liability arising out of allegations for employment practice violations stemming from COVID-19 vaccine-related exposures.
For much of 2021, employers have been dealing with new, difficult decisions relating to vaccines and the messages and policies they share with their employees. Employment disputes concerning vaccines and the return to workplace will likely arise in a variety of ways. The availability of coverage under existing Employment Practices Liability Insurance (EPLI) policies may vary as well depending on each unique claim scenario and policy wording.
Risk managers should consider reviewing the following sampling of potential COVID-19 EPLI vaccine-related exposures with their human resource leaders and legal counsel to discuss the appropriate methods for mitigating these risks. Risk managers should also consider discussing these scenarios with their insurance brokers to better understand how their specific EPLI policy may or may not respond:
Suits Over Vaccine Mandates: There have already been several instances of employees suing over vaccine mandates, but these suits have been about the mandate itself before it was applied against the individuals’ employment status and have been largely unsuccessful.
Disability Discrimination: Employers may face both disability and religious discrimination allegations if they mandate that employees take the vaccine or if they treat unvaccinated employees differently from vaccinated employees in return-to-work decisions. Employees may allege their religion prohibits them from being vaccinated or they may allege that an existing health condition prevents them from taking the vaccine -- either of which could violate federal, state or local anti-discrimination laws. Typically, EPLI policies expressly cover discrimination including discrimination based on religion and disability, but as with any situation, other elements of the policy could come into play to limit coverage.
The Kitchen Sink: Employers should anticipate emotional distress claims related to requiring or not requiring vaccines. For instance:
Employees who are required to return to the office after being vaccinated may allege emotional distress if all employees who return to the office are not vaccinated.
Alternatively, unvaccinated employees may allege emotional distress if they are required to return to the office because they feel they are at a heightened risk of exposure to the virus in the office with no appreciable value to working in the office.
Employers may also experience allegations of breach of privacy if they seek information from employees about their vaccination status and/or the vaccination status of family members prior to making return-to-office decisions.
Similarly, employees may bring whistle-blower claims relating to employers’ decisions on these matters alleging violations of privacy laws, civil rights laws and workplace safety issues.
During the pandemic, employers experienced many of these allegations occurring in the same dispute. Typically, EPLI policies do expressly cover employment-related emotional distress and retaliations claims, but as with any litigation alleging a wide array of allegations, EPLI policies may respond differently to different alleged grounds for recovery.
Wrongful Termination and Retaliation: Likely the most significant exposure employers will face will be wrongful termination and retaliation lawsuits brought by employees who refused to take the vaccine. If unvaccinated employees are terminated or allegedly disadvantaged because they are not allowed to return to the office until they’ve been vaccinated, they may allege wrongful termination, constructive termination or retaliation in violation of a variety of statutory and common laws. Again, typically EPLI policies expressly cover wrongful termination and retaliation claims but each fact scenario can present different challenges regarding coverage.
Age Discrimination: Employers may be exposed to age discrimination claims if they require higher-risk, older employees to get vaccinated first or arguably not continuing to accommodate older workers’ remote work after the vaccines are available. As discussed earlier, alleged discrimination is, as a general matter, typically covered under EPLI policies and age discrimination in particularly is often expressly addressed.
Labor Unrest: Employees could hold strikes or walkouts, whether unionized or not, in protest over their employer’s approach to vaccinations. The employer’s response to these protests could result in claims depending on what action the employer takes. Union and labor law-related claims are particularly challenging under EPLI as policies often contain statutory exclusions that reference the National Labor Relations Act and often carve out labor grievances from the definition of claim. Conversely, there may be some coverage available if the claim involves allegations of retaliation.
Failure to Protect: Employers could face failure to protect/Occupational Safety Health Act (OSHA) claims if they require vaccines and an employee(s) have a negative reaction or if they do not mandate and there is an outbreak in the workplace. Similarly, regarding labor unrest, coverage for OSHA-related claims can be difficult due to statutory exclusions that reference OSHA. These claims may also trigger bodily injury claims found in most EPLI policies. Nonetheless, if these claims result in whistle-blower retaliation claims, many policies may respond to that aspect of the claim.
Wrongful Death: Employers could face wrongful death claims if they mandate or recommend vaccines and there is an adverse reaction, or if they do not mandate and there are COVID-19-related deaths as a result. As previously mentioned, most EPLI policies contain bodily injury exclusions and there could also be questions around whether a claim under this type of scenario would allege any kind of covered wrongful act.
As a best practice, employers should review their EPLI policy to assess whether it will respond to vaccination-related issues in respect of employment matters. To assess coverage for any potential claims, EPLI policies should be reviewed for Bodily Injury/Property Damage (BI/PD) exclusions and potential carve-backs. Coverage would depend on the language used in the policy.
This document has been provided as an informational resource for Aon clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide legal or medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, Aon cannot be held liable for the guidance provided. We strongly encourage visitors to seek additional safety, medical and epidemiologic information from credible sources such as the Centers for Disease Control and Prevention and World Health Organization. As regards insurance coverage questions, whether coverage applies, or a policy will respond, to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determination.
While care has been taken in the production of this document and the information contained within it has been obtained from sources that Aon believes to be reliable, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the report or any part of it and can accept no liability for any loss incurred in anyway by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication.
All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.