We often talk about how connected our world is, thanks to advances in technology and the flow of goods, services, and talent between nations. While this has generally been to our collective advantage, the spread of the coronavirus across the globe illustrates one of the worst-case scenarios a connected world can experience.

The virus has been detected in at least 172 countries, according to The New York Times, and over 1 million total cases have been confirmed, according to Johns Hopkins's Coronavirus Resource Center.

As of April 3, the United States had 245,646 confirmed cases, the most confirmed cases by region; Spain is second with 117,710 confirmed cases.

The explosion of cases in the U.S. has affected virtually all industries, but few have been directly impacted as much as those in the insurance industry. While the effects are more pronounced on the life and health side, property and casualty has also been affected—and the full extent may carry on for quite some time.

Workers' compensation insurers, for example, may soon experience a torrent of claims related to the coronavirus, lawsuits if Covid-19–related claims are denied, and much more.

An Industry in Crisis

While Covid-19 isn't the first pandemic the workers' compensation marketplace has had to deal with, the way it has disrupted the economy and our collective way of life is vastly different compared with SARS, MERS, and others. People across the country are staying indoors out of an abundance of caution; hospitals have reached their tipping points; nearly 10 million jobless claims have been filed in the last two weeks as the U.S. economy practically reaches a standstill; and many have died as a result of the coronavirus.

All of this spells trouble for a workers' compensation industry with no consistency across the states in how illnesses are treated from a legal perspective.

Generally speaking, it's difficult for people who have contracted a disease to demonstrate or prove that it occurred out of employment, says Joe Paduda, principal at Health Strategy Associates, a national consulting group exclusively for the healthcare industry. "Essentially, for someone who contracts an infection, they would have to prove they got that at work," he adds.

The burden for the employee to "prove" they got ill as a result of their employment is made more difficult by the lack of available testing. Add in the fact that countless workers are now working from home—but can still be exposed to the virus in a number of ways—and Paduda says it is entirely possible that the industry could get backlogged with controverted claims, especially as more people get infected.

For those who contract Covid-19 while working from home, Paduda says, an insurer could reasonably argue the person did not contract the virus arising out of the course of employment but rather in a home-type setting. Therefore, the workers' compensation insurance company would not technically be responsible. The counterargument would be that they were working from home as they were told to do, but Paduda thinks there is a much more reasonable case the insurer could make that they did everything they could possibly do.

Despite this, Paduda says, if workers' compensation insurers and employers don't step up and accept responsibility, they will be inundated with lawsuits and legal expenses.

"Not only is it the right thing to do for workers' comp insurers to step up and cover people who contracted this who are employed, [but] it would also be much more fiscally prudent to do that because the tort system is gonna drive them out of business if they don't," says Paduda.

Scenarios to Keep an Eye On

Much remains to be seen as to how Covid-19 will continue to impact workers' compensation and the larger property-and-casualty (P&C) insurance industry. Certain scenarios, however, are already happening in real time.

Rick Roberts, a former president of RIMS who has worked in the risk management field for over 30 years, says there could be an increase in ergonomics-related claims for employers. Because Covid-19 forced many employees to immediately begin working from home, employers weren't able to do ergonomic evaluations for those employees. Even companies that typically provide such evaluations or ergonomic products have likely been restricted from doing home assessments. As a result, employers may see a spike in common ergonomic injuries such as carpal tunnel syndrome, tendinitis, lower back injuries, and more.

Another scenario centers around essential workers, like those in public safety and healthcare, who are still at risk of getting hurt on the job.

"The question is: How are they gonna get care when hospitals [and] healthcare facilities are avoiding any and all patients because of the Covid-19 risk, and they're all-hands-on-deck working to prepare for a massive tsunami of people who are infected?" says Paduda.

For patients around the country who were already injured, out of work, and seeing their doctor or physical therapist on a regular basis, the coronavirus has disrupted their treatment schedule. Even if their healthcare providers are still open, many patients will likely be concerned about possibly contracting Covid-19. This scenario, has increased interest in telemedicine and telerehab among workers' comp insurers, employers, and patients. This interest will likely be sustained beyond Covid-19's lifespan, as the last few months have shown that major disruptions to workers' comp, P&C insurance, and the global economy are certainly possible in today's connected society.

The future is never guaranteed, but Covid-19 has created a level of uncertainty that would have been unimaginable at the beginning of 2020. Insurance, specifically workers' compensation, will be part of the solution, without a doubt. But until that solution arrives, the workers' compensation industry can expect the turbulent times to continue.

From: PropertyCasualty360

Instant Insights /

Covid-19 Puts Workers' Comp to the Test

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