Will My Insurance Protect My Business from a Coronavirus Outbreak?

As the number of reported cases of the Coronavirus (COVID-19) continues to rise, employers are increasingly confronted with the possibility of an outbreak.

In general, there is no all-encompassing insurance policy that will protect your business if it shutters due to an outbreak. There are many factors to consider, including the type of coverage, type of loss and terms (we break this down in Part 2 below.) The best thing you can right now is to maintain a safe and healthy work environment for your employees.

Part 1: Disease Prevention in the Workplace

How is Coronavirus spread?

The available information about how the virus that causes COVID-19 spreads is largely based on what is known about similar coronaviruses. COVID-19 is a new disease, and there is more to learn about its transmission, the severity of illness it causes, and to what extent it may spread in the United States.

According to the CDC, the virus is thought to spread mainly from person to person, between people who are in close contact with one another (within about six feet) or through respiratory droplets produced when an infected person coughs or sneezes. These droplets can land in the mouths or noses of people who are nearby or possibly be inhaled into the lungs.

It may also be possible for a person to contract COVID-19 by touching a surface or object that has been contaminated with the virus and then touching his or her mouth, nose, or eyes, but this is not thought to be the main way the virus spreads.

People are thought to be most contagious when they are most symptomatic. Some spread might be possible before people show symptoms, and there have been reports of this occurring, but this is not thought to be the main way the virus spreads.

Here are actionable steps that will help you promote disease prevention in your company:

  • Closely monitor the CDC, WHO, and state and local public health department websites for information on the status of the coronavirus.
  • Proactively educate your employees on what is known about the virus, including its transmission and prevention.
  • Review your current HR policies and procedures and make sure you have a written communicable illness policy and response plan that covers communicable diseases readily transmitted in the workplace.
  • Place resourceful posters around the office and distribute disease-prevention information to your team via email or text alerts.
  • Place hand sanitizer throughout the office and encourage thorough hand-washing.
  • Consider measures that can help prevent the spread of illness, such as allowing employees flexible work options like working from home.
  • Consider canceling business travel to affected geographic areas and request that employees notify you if they are traveling to these areas for personal reasons. Employees who travel to China should be informed that they may be quarantined or otherwise required to stay away from work until they can provide medical documentation that they are free of symptoms.
  • Require employees to stay home from work if they have signs or symptoms (such as fever, headache, cough and difficulty breathing) of a communicable disease that poses a credible threat of transmission in the workplace, or if they have traveled to high-risk geographic areas, such as those with widespread or sustained community transmission of the illness.

Legal Considerations

Employers are both obligated to maintain a safe and healthy work environment for their employees and subject to several legal requirements protecting workers. For example, employers must comply with the Occupational Safety and Health Act (OSH Act), Americans with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA) in their approach to dealing with COVID-19.

Occupational Safety and Health Act of 1970

Under the federal Occupational Safety and Health Act of 1970 (the OSH Act), employers have a general duty to provide employees with safe workplace conditions that are “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Workers also have the right to receive information and training about workplace hazards, and to exercise their rights as employees without retaliation.

There is no specific Occupational Safety and Health Administration (OSHA) standard covering COVID-19. However, some OSHA requirements may apply to prevent occupational exposure to COVID-19.

In addition to the General Duty Clause, OSHA’s Personal Protective Equipment (PPE) standards and Bloodborne Pathogens standard may apply to certain workplaces, such as those in the healthcare industry.

Employers should continue to monitor the development of COVID-19 and analyze whether employees could be at risk of exposure. It is also important for employers to consider what preventative measures they can take to maintain safety and protect their employees from potentially contracting COVID-19.

Also, OSHA requires many employers to record certain work-related injuries and illnesses on their OSHA Form 300 (OSHA Log of Work-Related Injuries and Illnesses). OSHA has determined that COVID-19 is a recordable illness when a worker is infected on the job. Establishments that are required to complete an OSHA 300 log should be sure to include all COVID- 19 work-related infections.

The Americans with Disabilities Act

The Americans with Disabilities Act (“ADA”) protects applicants and employees from disability discrimination. It is relevant to COVID-19 because it prohibits employee disability-related inquiries or medical examinations unless:

  • They are job-related and consistent with business necessity; or
  • The employer has a reasonable belief that the employee poses a direct threat to the health or safety of him or herself or others (i.e., a significant risk of substantial harm even with reasonable accommodation).

According to the Equal Employment Opportunity Commission (EEOC), whether a particular outbreak rises to the level of a “direct threat” depends on the severity of the illness. Employers are expected to do their best to obtain public health advice that is contemporaneous and appropriate for their location and to make reasonable assessments of conditions in their workplace based on this information.

The EEOC has said that sending an employee home who displays symptoms of contagious illness would not violate the ADA’s restrictions on disability-related actions because advising such workers to go home is not a disability-related action if the illness ends up being mild, such as seasonal influenza. On the other hand, if the illness were serious enough, the action would be permitted under the ADA as the illness would pose a “direct threat.” In either case, an employer may send employees home, or allow employees to work from home, if they are displaying symptoms of contagious illness.

The ADA requires that information about the medical condition or history of an employee, obtained through disability-related inquiries or medical examination, be collected and maintained on separate forms and in separate medical files and treated as a confidential medical record. Employers should refrain from announcing to employees that a coworker is at risk of or actually has a disease. Instead, employers should focus on educating employees on best practices for illness prevention.

Employee Leave Requirements

If an employee, or an employee’s family member, contracts COVID-19, the employee may be entitled to time off from work under federal or state leave laws. For example, an employee who is experiencing a serious health condition or who requires time to care for a family member with such a condition may be entitled to take leave under the Family and Medical Leave Act (FMLA). An illness like COVID-19 may qualify as a serious health condition under the FMLA if it involves inpatient care or continuing treatment by a health care provider. Employees may also be entitled to FMLA leave when taking time off for medical examinations to determine whether a serious health condition exists.

Many states and localities also have an employee leave laws that could apply in a situation where the employee or family member contracts COVID-19. Some of these laws require employees to be given paid time off, while other laws require unpaid leave. Employers should become familiar with the laws in their jurisdiction to ensure that they are compliant.

Some employees may wish to stay home from work out of fear of becoming ill. Whether employers must accommodate these requests will depend on whether there is evidence that the employee may be at risk of contracting the disease. A refusal to work may violate an employer’s attendance policy, but employers should consult with legal counsel before disciplining such an employee. However, if there is no reasonable basis to believe that the employee will be exposed to the illness at work, the employee may not have to be paid for any time that is missed.

Compensation and Benefits

If employees miss work due to COVID-19, whether they are compensated for their time off will depend on the circumstances. As noted above, employees may be entitled to paid time off under certain state laws if they (or a family member) contract the illness. In other cases, non-exempt employees generally do not have to be paid for the time they are not working. Exempt employees must be paid if they work for part of a workweek, but do not have to be paid if they are off work for the entire week. Note that special rules may apply to union employees, depending on the terms of their collective bargaining agreement.

Employees may be entitled to workers’ compensation benefits if they contract the disease during the course of their employment. For example, employees in the healthcare industry may contract the disease from a patient who is ill. Whether an employee is eligible for other benefits, such as short-term disability benefits, will depend on the terms of the policy and the severity of the employee’s illness.

Part 2: Will my insurance coverage help me recoup losses resulting from COVID-19?

There are many factors to consider, including the type of coverage, type of loss and terms.

Workers’ Compensation

To be covered by workers’ compensation, it must be determined that the loss to the employee was a result of the course of employment, which can be hard to determine in the case of an outbreak. If the employee traveled, on business, to a high-risk area, they might have a more reasonable case. Proof of causation is a major step.

In the event of an outbreak within the U.S., it will be important to document right away with your carrier any potential exposure or infection of an employee.

Organizations will global workforces should consider separate foreign voluntary workers compensation policies that offer state-of-hire or country-of-hire benefits to address gaps in coverage.

General Liability

Manufacturers of anti-viral drugs may face product liability litigation. Public-facing companies, such as hospitals, grocery stores, and airlines, may experience litigation if customers link their illness to staff members’ illness. Worker’s compensation will not be triggered to cover customers or contractors. And again, proof of causation is a major step.


In general, property coverage requires direct physical damage to the property of the business, customer, or supplier. People choosing not to travel to a business to work – or to shop – does not typically trigger coverage.

Trade Disruption

Companies that diversify their chain of suppliers are in the best position when supply-chain disruptions, such as quarantines, port closures, confiscations or embargoes, take place.

Trade disruption insurance may provide additional coverage to companies, as it doesn’t require a direct physical loss to goods or their conveyances.

Again, there are many factors to consider, including the type of coverage, type of loss and terms. Please contact our team for details on any of the policies noted above.


Additional Resources from Fusco & Orsini:

Common Policy Exclusions

Helpful Resources to Utilize for Your Business and Your Family

Resources on COVID-19:

The CDC, WHO, and OSHA have all created informational material on the virus and its symptoms, prevention and treatment that can be helpful for employees:

CDC Coronavirus Disease 2019 (COVID-19) Situation Summary

World Health Organization Coronavirus disease (COVID-19) advice for the public

OSHA Safety and Health Topics: COVID-19


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