The Covid-19 global pandemic changed how Americans work, seemingly overnight. As many offices transitioned their teams to remote work, others in industries deemed essential scrambled to procure PPE and prepare their workplaces for new socially distant norms. Now that non-essential workers are beginning to return to their workplaces, a common question for employers becomes, “What happens if an employee is exposed to Covid-19 on the job? Is this a workers’ compensation issue?”

That depends, says Paul Hughes, president of Orlando-based Libertate Insurance Services, which provides workers’ compensation coverage to professional employer organizations, including XMI.

Normally, a communicable disease that could be contracted during the ordinary course of life (like the cold or flu) is excluded from workers’ compensation coverage. But several states have already amended their workers’ compensation laws to include Covid-19 “presumption” clauses.

To date, 26 states have added presumptions to their workers’ compensation laws (Tennessee is not one of them).

“The right answer is based on the state of the employee,” he says. “If I’m an employee in the state of California, it’s assumed that if I get Covid-19 it’s occupational. If that same thing happens in Tennessee, there are three categories of work I have to fit into first to determine whether it’s a workers’ compensation issue. Each and every state is handling this very differently.”

While states can’t agree on whether contracting the coronavirus at work is a workers’ compensation issue, they do agree on one thing—Covid-19-related workers’ comp claims won’t be counted toward the loss experience rating.

“Because this is a pandemic and a once-in-a-lifetime event, all carriers have agreed to treat it like they would terrorism or an earthquake, he says. “Claims arising from events like that are excluded from experience ratings.”

Because of this exclusion, Hughes underscores the importance of two things for employers. First, if you suspect there will be a workers’ comp claim filed because of Covid-19, report it to your PEO or workers’ comp carrier immediately. Second, make sure it’s reported correctly so that it can be coded appropriately. Otherwise, you could see your experience rating impacted.

That’s not to say employers won’t see some impact to workers’ compensation coverage going forward. It’s just too soon to say what the impact to the industry—and future premiums—might be. Hughes points to modeling released by the National Council on Compensation Insurance in May that shows a wide range of potential losses to the industry, between 8 percent and 183 percent.

“That’s a pretty big range,” he says. “They just have no idea yet.”

For example, there could be an increase in the number of claims arising in frontline, COVID-19-related occupations, but that could be offset by a decrease in claims due to the large number of employees now working remotely.

If the losses are enormous, Hughes expects there will be some kind of federal relief.

Coronavirus and workers comp: pandemic-related considerations

If the pandemic caused you to lay off, furlough or reassign employees to different roles, notify your PEO or workers’ compensation insurance carrier. Workers could need to be reclassified for payment purposes, and layoffs/furloughs may result in a lower premium.

Another consideration is remote work. Even as offices begin to reopen, Hughes expects employers will continue to encourage working from home.

“I’ve been working from home for 75 days straight and now I’m beginning to wonder if I even need an office,” he says. “With workers’ compensation insurance, the responsibility is to cover the employee, and it’s assumed that the employee works regular hours,” he says. “If a claim comes in over regular hours, it’s covered. But the reality is, with remote work especially, it’s a nebulous concept. Our workdays are not 9-to-5.”

Whether remote work continues to be necessary in order to maintain social distancing guidelines or it just sticks as employers see that workers can be productive while working at home, Hughes recommends reviewing and revising policies related to remote work, outlining expectations and work hours, if possible.


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