In this week's Big I Buzz, we are discussing new changes coming to IIAW Committees, how agents can adapt to the "new normal" and how major US insurers see lower coronavirus costs than expected. 

New, Exciting Changes to IIAW's Committees

The IIAW Committees are more important than ever! With the launch of our Online Community on November 1st, we will be moving our current committees online, and committees will now be called "Groups".

Group participation in our Online Community with be recognized and awarded! Earn gift certificates to your hometown restaurants, donations for your favorite local charity, IIAW swag and prizes.

If you're new to the Association or have thought about joining a committee in the past, now is the time to join as a Thought Leader on our new Online Community. A "Thought Leader" is an industry leader for topics within a Group. If you want to join a Group without being a Thought Leader, you can! Three is no limit to the number of Groups you can be a member of. The invitation to join a Group as a member and not a Thought Leader will be sent at a later date. Learn more about the Online Community, its Groups and Thought Leaders here. 

Digital, Accelerated: How Agents Can Adapt to the New Normal

With easy, instant, online buying experiences now the norm, consumers have come to expect the same from every company they do business with. COVID-19's impact on our everyday normal has accelerated the shift towards digital. Foundational tools for a digital shift internally include agencies setting up a virtual private network (VPN), investing in a cloud-based agency management system (AMS) and also, setting up a Voice over Internet Protocol (VoIP) phone system to let your staff make and receive calls from your office number even if they are working from home. Read more from Independent Agent here. 

Major US insurers see lower coronavirus costs than expected

A new Q2 2020 report of five insurers that have large US operations shows what they call a 'relatively modest $2.5 million blow'", according to analysts cited by Reuters. "The $2.5 billion loss is lower than was initially feared and the loss has been absorbed by the industry without insurers resorting to more bad tidings in the form of major claims just around the corner, considering that the coronavirus continues to spread," according to Insurance Business Magazine.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren't subscribed, click here to add your email to our mailing list. We hope that everyone has a great rest of their week!

States are in various stages of reopening following months of COVID-19 lock downs. As the states progress through the phases, businesses are making key decisions regarding masks, should masks be required or optional? Some legislatures have taken the    responsibility for this decision away from business owners and are requiring masks be worn; but other states leave the decision to the business owners.

In states where the decision rests with the business, some operations have made the corporate decision to require masks be worn by all who enter the premises. From a legal liability perspective, is this necessary?

Legal Liability

Legal liability is liability imposed by the court or regulators on the person or entity legally responsible for injury or damage suffered by another party. Such legal obligations (or liability) can arise from intentional acts, unintentional acts, contracts (express or implied) or regulations. Legal liability generally focuses on civil wrongs but can include criminal wrongs. “Legal liability” exists when:

• The wrongdoer is found guilty of “Negligent Conduct” (breached the duty owed);

• The injured party suffers actual damages; and

• The wrongdoer’s “negligent conduct” is the proximate cause of the injury or damage.

A key requirement towards proving “negligent conduct” and ultimately legal liability is proving that the supposed tortfeasor (the wrongdoer) has or owed the injured party a specific duty of care and breached or failed to satisfy that duty. The degree of care owed to an injured party is based on the relationship between the wrongdoer and the injured party.

The greater the degree of care required or expected, the lower the threshold for breaching a duty owed (it is easier to breach a duty when greater care is required). Courts generally recognize four degrees of care or “levels” based on relationships are:

• Slight Negligence: A high degree of care is required;

• Ordinary Negligence: Requires “reasonable” care such  as would be provided by a reasonable and prudent  person;

• Gross Negligence: Very little care beyond slight care (not to be  confused with slight negligence) is required. This is represented by a deliberate or reckless disregard of a duty to exercise care which is  likely to cause foreseeable and significant harm; and

• Negligence per se: A breach of duty because the law says it is.  Negligence per se requires: 1) the at-fault party to violate the  law, 2) the law to pertain to public safety, 3) the violation of the  law be the cause of the injury, and 4) the injured person be a  part of the class of persons the law was designed to protect.

In a business/customer relationship, the business generally owes the customer a duty of reasonable care. While there are certain business relationships that increase the duty owed (such as that owed by an operation transporting passengers in a vehicle), reasonable care is the most common duty owed. For sake of this review, assume the business owes a duty of reasonable care.

Examples of duties owed by business establishments under the concept of reasonable care include repairing/correcting known hazards; warning against intrinsic/unrepairable hazards; and taking steps to avoid preventable hazards.

Consider the example of a restaurant that has several sets of steps in the path to the dining area, where a member of the wait staff has spilled some water and where the plate comes out of the oven very hot. Reasonable care in such a restaurant might include actions such as the person showing the customer to a table warns of the steps (“watch your step”), the wait person puts up a little yellow sign warning of the wet floor, and the person delivering the food says, “Be careful, the plate is hot.” These are examples of reasonable care.

Let’s return to the question of masks and legal liability associated with requiring or not requiring them. For this discussion, the injured party moves from a restaurant (it’s hard to eat while wearing a mask) to a retail location.

From the perspective of reasonable care, are masks necessary to avoid legal liability?  

(Note, this discussion does not and will not address the availability or applicability of liability insurance coverage. Only the concept of legal liability regarding customers in a typical retail setting is addressed in this article.)

Effectiveness of Masks

Before exploring the relative differences in legal liability between requiring masks and allowing customers the option, the purpose and effectiveness of masks must be considered. Discussions focused on the effectiveness of masks may be more complicated than the  concept of legal liability because of the emotions and the lack of clear

information surrounding the wearing of masks.

Purpose: The Centers for Disease Control (CDC) and the World Health Organization (WHO) both state there are essentially two “grades” or levels of masks: 1) those that filter out the virus designed to protect the wearer from contracting the virus and prevent the wearer from spreading the virus; and 2) those intended to prevent the wearer from spreading the virus, but that do not necessarily prevent the wearer from contracting the virus. The masks most often worn by the public are the second type – masks intended only to prevent the spread and not the contracting of the virus.

Effectiveness: Unfortunately, the question of effectiveness seems to be unanswerable. Some claim the masks are very effective (giving percentages of protection without credible source substantiation) and some say they are little more than a “feel good” measure using drywall dust and even smoke to prove the point. Even the CDC and WHO are inconsistent in their messages. In regard to legal liability, effectiveness is largely irrelevant.

Masks Optional

Business operations choosing to allow the customers to make the mask-wearing decision may subject themselves to accusations by a customer that he or she contracted the virus from an unmasked  person or persons in the store. The injured person may assert that close contact with an unmasked person or persons led to their  sickness.

Such charges may be impossible to prove. A virus is a humankind exposure and is not limited to a location where people are not wearing masks. If the claimant visited the grocery store, bank,  pharmacy, office and/or other places during any particular day, proving the only place where they were exposed to the virus was the grocery store would be of utmost difficulty. Add to this the reality that other members of the family may have been several places, contracted the virus, and brought it home to everyone else in the house. Lastly, the masks worn in public are not designed to keep the virus from getting in, they are designed to limit the expulsion of the virus from the nose and mouth.

Frankly, lacking a law to the contrary, the business owner does not owe the customer a duty beyond reasonable care. Reasonable care is limited to the premises and what the business can actually control; viruses exist in more places than just the business premises and a business cannot be expected to protect a customer from exposure in all aspects of a customer’s life. Narrowing the person’s exposure down to one business on one particular day is truly picking gnats out of pepper.

Additionally, the legal concept of assumption of risk may be an affirmative defense to the mask-optional discussion. Assumption of risk is a legal doctrine under which an individual is barred from   recovering damages for an injury sustained when he or she voluntarily exposed him or herself to a known danger. Put another way,   assumption of risk prohibits the injured party from seeking damages on the basis that the plaintiff (injured person) knew of a hazardous or potentially hazardous condition and willingly exposed him or herself to it.

Assumption of risk defenses require the defendant to show:

• The injured party had actual knowledge of the risk involved  (conspicuously post signs warning “Enter at your own risk, masks are  optional”); and

• The plaintiff voluntarily accepted the risk (they entered the store).

When a customer visits a business where masks are optional, they make a conscious decision to enter the premises or not. If the injured party assumed the risk by entering the premises, the law generally  recognizes the defendant no longer owes a duty to protect the plaintiff against that risk.

Given the relatively unclear requirements of reasonable care, the difficulty in proving the virus was contracted at a particular place on a particular day, the doctrine of assumption of risk, and the limited purposes of the masks, business owners are unlikely to be held legally liable solely because masks were not required of all customers.

Requiring masks may exceed the requirement of reasonable care. In fact, certain disabilities and ADA laws may make it impossible for all customers to wear a mask. If courts made mask wearing the  minimum standard of reasonable care, removing the freedom of personal choice generally granted to the business owner and the customer/citizen, in a sense, the court would “legislate” masks by making mask wearing the minimum standard of care while ignoring the protection of assumption of risk. Some states have already undertaken legislative efforts to protect business owners.      

Masks Required

Previous paragraphs addressed the types and relative effectiveness of masks. Does requiring all customers to wear a mask decrease the business owner’s potential for being held legally liable?

Health officials recommend (where not a requirement) masks be worn that prevent the spread of droplets and mists from the nose and mouth that may contain the virus. Again, these masks aren’t  necessarily designed to prevent the wearer from contracting the virus, but when every customer wears masks, the theory is everyone has a reduced (though not completely eliminated) chance of contracting the virus.

On the surface, requiring everyone to wear a mask appears to lower the chances that the business will be accused of contributing to or causing a person to contract the virus. Requiring a mask seems to be a physical manifestation of an exculpatory statement such as, “Not Responsible for Broken Windshields” or “Enter at Your Own Risk, Not Responsible for Injury.” The statement doesn’t make it so.

Individuals may be less likely to sue but requiring masks may not lower or heighten an operation’s legal liability for injury to a  customer – if it can be proven the virus was contracted at the location. What other steps were taken to protect the customer?

Legal liability is a function of duty and facts. Requiring masks of all customers may be above and beyond the duty of reasonable care owed to customers.

To Mask or Not Mask

Requiring masks or allowing customers to make a personal choice apparently has no effect on the business owners’ ultimate legal liability. What is the duty owed (reasonable care)? Did the owner meet the duty owed? If both questions are answered “yes,” the business is not legally liable for any injury suffered.

Can the infected person prove the virus was contracted at the business? Given the facts of a virus and particularly this virus (with its long incubation period), proving it was contracted in any one place on any given day is nearly impossible.

Holding a business legally liable without other clear and convincing evidence simply because customers were not required to wear masks forces the court to set a standard of care almost impossible to  maintain in the future. Every flu season or the event of another community sickness will subject business owners to a higher degree of care than ever required in history or should be considered   reasonable.

A virus is a natural organism that man can avoid only so long. Holding a business owner legally liable is unreasonable given the facts of care and the reality of a virus.

Requiring masks may dissuade some from naming the business in the suit; but not requiring masks likely does not increase the overall chances of being held legally liable.

In the final days of its 2019-20 term, the Supreme Court issued a decision with potentially vast implications for religious organizations.  In Our Lady of Guadalupe School v. Morrisey-Berru, the Court ruled that parochial school teachers do not, for the most part, enjoy protections under federal employment laws.  This decision, and the potential for the Court to expand on it in the years to come, could have a major impact on insured claims against religious institution employers.

The Our Lady of Guadalupe School Case and Decision

The Our Lady case is actually a combination of two employment discrimination cases brought by Catholic school teachers in the Los Angeles area.  In both cases, the teachers argued the schools terminated them for discriminatory reasons.  The first plaintiff, Agnes Morrisey-Berru, claimed her former employer fired her based on her age.  The second plaintiff, Kristen Biel, argued her former school terminated her because she had breast cancer.

Before delving into the Court’s opinion in Our Lady, however, it is necessary to discuss a bit of background.  In 2012, the Supreme Court considered a similar case in which a terminated parochial school teacher sued her former employer for discrimination under the Americans with Disabilities Act.  In that case, the Court recognized a “ministerial exception” to federal employment laws rooted in the First Amendment’s protection of the free exercise of religion.   Specifically, the Court dismissed the plaintiff’s suit, holding that the ministerial exception precluded her claim given that she had received extensive religious training, was considered a minister of her church, and her firing fell into a category of decisions religious institutions make that are essential to their central mission.

Despite important differences between the two cases, the Court reached the same decision in Our Lady as it did in 2012.  In the 2012 case, the Court ruled the ministerial exception barred the teacher’s ADA claims based on evidence that the fired teacher had extensive religious training and was considered by her church to be a “minister.”  The same could not be said for the Our Lady plaintiffs, as the two teacher plaintiffs in the case did not have any specific religious education credentials, and one of them testified that she was not even a practicing Catholic.  However, according to the Court’s majority opinion, whether a teacher has religious training is

inconsequential to the ministerial exception analysis.  What mattered in Our Lady was that the teachers taught religious curriculum, prayed with their students, and accompanied them to mass.  Ultimately, in dismissing the teachers’ claims, the Court held that the schools had initially made the determination that the teachers knew enough about Catholicism to teach the subject, and “judges have no

warrant to second-guess that judgment.”

Now What?

Despite the fact that both the Our Lady decision and the 2012 case involved teachers, the rulings could have much broader implications.  In her dissent, Justice Sotomayor criticized the majority, arguing it had destroyed the existing standard of review for the ministerial exception and replaced it with a single consideration: “whether a church thinks its employees play an important religious role.”  Not only could this “strip[] thousands of schoolteachers of their legal protection,” according to Sotomayor, it could also extend to “countless coaches, camp counselors, nurses, social-service workers, in-house lawyers, media-relations personnel, and many others who work for religious institutions.”

If you or your agency have religious institution clients, this decision, and its progeny, could have a considerable impact on the scope of potential employment-related claims and litigation.  If lower courts consistently (or even more 

broadly) apply the holding from Our Lady, it could greatly reduce the amount (or at least the success) of employment discrimination claims against religious institutions. Moreover, if Justice Sotomayor’s dissent proves prescient, the opinion could serve as the backbone for future decisions dismissing discrimination claims brought by any employee of a religious organization, or even claims brought by parishioners involved in community outreach or charity work.

Conclusion

In Our Lady of Guadalupe School v. Morrisey-Berru, the Supreme Court expanded the ministerial exception to employment discrimination claims brought against religious institutions.  While the case involved teachers at parochial schools, the decision may impact claims brought by any employees of religious organizations.  Keep an eye on this column and updates from the IIAW for related developments.

In this week's Big I Buzz we are covering Allstate's push into the independent space, pro sports players associations stance on the Senate Republican stimulus proposal and we look into the states ranked by uninsured rates. 

Allstate's $4 billion push into the independent space

Allstate has announced that it will acquire National General Holdings for $4 billion in their attempt to step into the independent agent channel. According to Insurance Business America, "There is talk that Allstate is in the middle of a major restructuring that would see thousands of staff being laid off. News of a major acquisition deal despite Allstate's alleged internal issues raises more questions than answers, and some may wonder why the insurer went through with this deal."

Pro sports players associations come out against key McConnell stimulus priority

The executive directors of the NFL, NBA, NHL Major League Baseball and Major League Soccer players associations signed onto a letter raising concerns about the liability protections included in the Senate Republican proposal introduced last week. Read more about the proposals from both the Republican and Democratic parties here. The players associations were opposing the structure of the proposal because the legislation does not explicitly provide liability protections for those who engage in willful misconduct or grossly negligent behavior, providing a tighter scope on the bill's safe harbor than the players association asserts, according to CNN. 

States ranked by uninsured rates

Becker's Hospital Review has ranked the states by their uninsured rates. This report compared uninsured rates in 2018 to rates in May 2020 with information from the U.S. Bureau of Labor Statistics and the Urban Institute. Texas ranked at the top with the highest uninsured rate in the U.S - with 29 percent of adults uninsured as of May, according to a report from Families USA. The total number of uninsured in the U.S. climbed to 21 percent due in part to layoffs tied to the COVID-19 pandemic in recent months, according to Becker's Hospital Review. Wisconsin's uninsured rate sits at 10 percent at the time of this report. 

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren't subscribed, click here to add your email to our mailing list. We hope that everyone has a great rest of their week!

2020 has become the year of the remote worker, courtesy of the coronavirus pandemic. Is your business one of the many that has transitioned to remote operations? Have you considered how that change affects your insurance liabilities as a business owner?

Your Trusted Choice Independent Insurance Agent® can help you reassess your risk picture. Managing a remote workforce may be new to you, but independent agents have rich expertise in helping business owners manage risk — whether employees work from home or on-site. And because they represent multiple insurance companies, Trusted Choice agents can offer you and your business customized coverage based on your unique and changing needs.

In addition, your Trusted Choice agent can offer you resources and advice for developing your company’s remote work program. It should address, at a minimum:

1. Safety guidelines for a home office setup.

2. Designated work, break, and lunch times.

3. Safety training.

4. Physical inspections of remote workers’ home offices.

5. The workers’ compensation rules for your state as they apply to remote workers.

Here are a few insurance questions your Trusted Choice agent can help you answer:

Does my commercial general liability policy cover remote employees?

As part of your business insurance package, general liability protects your business against financial loss resulting from bodily injury, advertising injury, and property damage caused by your business or employees. Your Trusted Choice agent can review your policy to be sure that you are still adequately covered while employing remote workers.

If your remote employee must meet business clients from home, it will be your commercial general liability policy that must cover any injury, not the employee’s homeowners insurance. Your agent may suggest additional coverages such as management liability insurance to protect you and your workers from this and other risks not covered by your commercial general liability policy.

Business property insurance protects the physical location of your business and any tools, equipment and inventory. Your business property policy may exclude or limit the coverage for property that is not located at your business premises. Your agent can help you determine if you need additional coverage for property used off-premises by remote workers.

An employee’s own homeowners policy usually will not cover the loss of business-owned equipment that is damaged or stolen in their home.

Are my remote workers covered by the workers’ compensation insurance my company purchases?

  It is incumbent on you as an employer to ensure a safe working environment for your employees — whether they work at your business location or from their homes. In general, your workers’ compensation insurance covers all of your workers for illness or injury arising out of or in the course of employment — no matter where they physically work.

However, ensuring a safe working environment for remote workers increases your responsibilities as an employer.

In addition, it is more difficult for a remote worker to demonstrate that an injury or illness “arises out of” or occurs “in the course of” employment — your telecommuting policies and procedures will be of critical importance. Will my cyber liability insurance cover remote employees? The answer to that question is not simple because cyber policies vary greatly and may contain exclusions that would affect remote workers. And a remote worker using a public or a poorly secured home network could put your entire business at risk and expose your customers’ private information. Your Trusted Choice agent can help you be sure you have appropriate cyber liability coverage. In addition, you must ensure that every device an employee uses is protected from cyber breaches. First, require that employees use only your business-owned devices for work; second, set every employee up with a secure connection from their home office to your business network. You may have to engage the help of an IT specialist, but the investment pales beside the potential costs of a cyberattack.

Let Trusted Choice help you keep your business and employees safe … anywhere they work.

For more help with your telecommuters, consult these articles:

Inspiring Productivity and Connection with Remote Workers

Ways to Keep Remote Workers Connected and Engaged