Embroker Team October 7, 2022 4 min read

How Will COVID-19 Impact Workers Compensation Insurance?


As authorities begin to relax and lift their shelter-in-place orders, signaling a return to a “new normal” for businesses, companies are about to undertake a greater risk of issues covered under workers compensation than was the case just a few months ago.

The impact on your workers compensation program will primarily depend on your compliance with regulations, partnership and communication with employees and insurers, and consistency in adjusting to and applying new operational guidelines in your organization.

First, let’s acknowledge that with COVID-19, the effects are unprecedented. We have often heard its impact compared to 9/11, SARS/MERS, and the financial crisis of 2008 all wrapped together. Each of those historic events moved markets, forced people to adjust their way of living, and influenced changes to business never before conceived. But in retrospect, they were localized. COVID-19 is different. It is universal in impact and insurance is not immune to it.

Right now, no one knows the answers with certainty as to what the insurance industry will do, how laws will change, and what the final outcome will be.

That being said, we take it as our business to help your business make sense of the situation and guide your company to the best of our ability in this confusing time. Hopefully, we will be able to provide more clarity as to your options and responsibilities related to workers compensation and employee safety moving forward.


The first step in compliance has nothing to do with a claim.

It’s as simple as asking yourself “Are the states where I have employees working included on my insurance policy?”

To find out, review your workers compensation policy for the list of covered states in Items 3A and 3C on the Declarations page. 3A should have all of the states in which you reported having employees or payroll at the beginning of the policy term.

3C should say “all other states except ND, OH, WA and WY.” Those four states are Monopolistic and require you to purchase insurance through the state itself (we’ve linked to the states to help). If you’re missing states in 3A right now and you’re an Embroker client, let’s connect to adjust your policy as needed.

Every jurisdiction has specific laws pertaining to workers compensation. For employers with multi-state operations, what is the rule of law in one state, may not be in another. Companies who were able to build their resilience strategies around employees working from home may find the number of states in which they have differing WC laws has grown significantly versus when those employees were sitting in the office.

At this time, states differ in their approach regarding the potential compensability of claims related to COVID-19. The situation is fluid. Some states have ordered that employee illness related to COVID-19 are to be covered under workers compensation, but to which employees this may apply to differs.

Most notably, California ordered that employees required to be in the workplace (outside their home) during a stay-at-home order are considered to have “an increased risk of exposure” and therefore should have workers compensation benefits apply. Other states limit the scope to “front-line” healthcare workers/first responders. There are even a select number of states that have not made any changes to their laws as respects COVID-19.

While there are continued efforts by legislators and executives to modify laws, even when successfully doing so, courts, such as one ruling in Illinois, can reverse or modify the law/order. Although public policy is in a time of swift change, we still recommend combining reliance on the experts – the claims managers dealing with the fluidity of these regulatory changes on a daily basis – with employers keeping themselves up to date with their jurisdictions’ changes.

Your insurer is obligated to manage and adjust claims in accordance with applicable laws. Your role as the employer is to support that process through your compliance with policy terms, comprehensive documentation, and timely, clear communication.

Communication and Partnership with Employees

Employees are the backbone of your business. Therefore, open, and consistent communication is key to maintaining a trusted partnership with them. Your team has gone through a lot of change and looks to you for leadership and clear guidance.

A key step in guiding your staff is consulting with appropriate resources for “reopening” protocols. You may need to consider physical (re)conditioning and site reorientation strategies to support your team as they return to the workplace or continue to work remotely.

If your organization is able to continue working remotely, now is the time to discuss what is needed to continue. It’s essential that your employees are aware of ergonomic best practices, workspace safety, and general wellness resources.

Regular check-ins at all levels should be encouraged to demonstrate your empathy and sympathy towards staff. It also provides you, the employer, with valuable information about potential exposure and opportunities for further support and improvement.


With all of the uncertainty surrounding the compensability of COVID-19 claims, establishing the expectations of what information is needed and how your company will protect that information is critical. Review communication levels and appropriate documentation practices with managers and employees.

Any changes to company policies need to be well documented, distributed, and confirmed as understood by employees. Your mutual partnership objectives should be to operate within those policies and enforce them together.

Adhere to your established operating principles and you’ll create a working environment employees will understand and recognize as focused on their safety and well-being.

Modifications to states’ approaches to workers compensation will continue. The best thing that you can do is maintain compliance, communicate, document, and be consistent. In other words, be proactive at the highest level possible. In doing so, you will create a working environment with employees that they believe will benefit everyone from the efforts being expended.

If you have additional questions regarding potential coverage or need additional support, please reach out to covid19@embroker.com

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