You are leaving risk-strategies.com
By accessing this link, you will be leaving Risk Strategies website and entering a website hosted by another party. Please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Risk Strategies website. We encourage you to read and evaluate the privacy and security policies of the site you are entering, which may be different than those of Risk Strategies.
Full FDA approval of the Pfizer vaccine spurred many companies to begin mandating vaccines for their employees. This decision is complex and fraught with exposures and liabilities. United Airlines has recently been sued over its vaccine mandate, from employees claiming the airline has not accommodated religious or medical exemptions. Companies that decide not to mandate vaccines, however, are just as likely to face litigation.
In early September, President Joe Biden signed an executive order requiring vaccinations for all federal employees and health care workers. In addition, Mr. Biden announced that he has directed the Occupational Safety and Health Administration (OSHA) to draft a new emergency rule requiring all businesses with 100 employees or more to mandate vaccination for their employees or require weekly testing. If companies fail to comply, they will be fined. This decision has already received pushback, including some questioning its legality and enforceability, but should it be formally adopted by OSHA in a few weeks, it will affect 80 million Americans.
This is a rapidly evolving situation with no “best practices” road map and more questions than answers. The one thing experts can agree on is that vaccine mandates and the related executive order will lead to significant increases in litigation, potentially exposing businesses to claims from employees and –quite possibly - customers.
OSHA Emergency Rule Considerations
If the OSHA emergency rule is adopted and companies have to mandate employee vaccinations and testing, there is a significant cost burden placed on companies, many of whom likely did not budget for enforcing these mandates. This raises the question: who is footing the bill? Will the federal government provide financial support so that companies can more easily comply?
In addition, knowing an uptick in mandate-spurred claims is inevitable, will the federal government also provide a legal backstop to support companies’ looming legal fees? This may help incentivize widespread compliance.
The Choice To Mandate May Be A Business Survival Necessity
For some industries, those requiring in-person work, mandating vaccines could be crucial to survival. Retail, health care, hospitality, and manufacturing businesses all took an enormous financial and operational hit during last year’s forced shut downs, causing revenue losses that can take years to recover from.
Regardless of industry, businesses moving forward with vaccine mandates need to make sure they’re taking every precaution and covering all of their bases. Exemptions need to be offered that comply with the Americans With Disabilities Act and honor religious beliefs. At no point can the mandates be, or appear, discriminatory. Consult legal counsel if available when your developing vaccine mandate protocols.
The Choice Not To Mandate: Proceed With Caution and Precautions
Even if the OSHA rule is adopted, not all businesses will choose to mandate vaccinations or even strongly encourage them. This choice also exposes businesses to lawsuits from employees who feel the work environment is unsafe, even hostile. To protect against litigation, companies must be able to prove they’ve taken every precaution to mitigate the spread of COVID-19 in the workplace. Precautions can include sanitizing offices, social distancing, proper ventilation, and mask mandates.
Management Liability Coverage Implications
Increased litigation from vaccine mandates will heavily impact Employment Practices Liability Insurance (EPLI) coverage, which protects against claims by workers that their legal rights as employees have been violated. It will also affect Directors & Officers (D&O) coverage, in instances where executives are sued by clients, customers, or employees for negligence and company mismanagement due to their mandate-related decisions.
How Will Carriers React?
In coming months, any uptick trend in claims related to vaccine mandates should inform the likely long-term effect on carriers and the market. No matter what business leaders decide, they need to make sure that they are doing everything they can to cover their bases, protect their employees, and shield themselves from potential litigation.
We will be watching closely and will update you here on the Knowledge Center as we learn more about how this developing issue will impact coverage and rates. For expert consultation on how your business should proceed, reach out below.
Want to learn more?
Find me on LinkedIn, here.
Connect with the Risk Strategies Executive Liability team at MLPG@risk-strategies.com.
Email me directly at email@example.com.