COVID-19: Class Action Suits Grow as Businesses Return to ‘New Normal’

COVID-19: Class Action Suits Grow as Businesses Return to ‘New Normal’
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BY:
Michele Epstein

Vice President, Professional & Management Liability

September 16, 2020

In late May, most states that had imposed stay-at-home orders or shelter-in-place mandates to help prevent the spread of COVID-19 began to lift certain restrictions for many businesses. But until state officials and health experts see significant improvements in areas such as expanded testing, tracking of infected persons, and vaccine development, businesses must learn how to operate in a “new normal” environment that includes adhering to specific reopening guidelines.

As businesses learn how to safely reopen and strive to stay in compliance, legal experts in a recent survey have reported an increase in the number of newly filed class-action lawsuits. In fact, as of May, more than 500 new class-action suits associated with the pandemic and shutdown-related matters were filed, with 70% of legal decision-makers predicting that number will vastly increase before the end of this year.

According to the report, of the class action suits filed:

  • 25% were against insurance carriers regarding business-interruption coverage claims.
  • 25% were against educational institutions over tuition refunds.
  • 10% were against gyms and entertainment venues/events.
  • 8% were against the airline industry and the government.
  • 7% were against financial institutions over CARES Act claims.
  • 17% were filed in other industries, such as correctional institutions, and about issues such as cruise line negligence, price gouging, etc.

The survey goes on to report that due to the number of layoffs across the country and the changes in workplace employment practices, experts fully anticipate a substantial rise in the number of labor and employment lawsuits.

Conclusion
As the country continues to navigate the process of reopening, your business clients will face a multitude of challenges as they begin to slowly adapt to these and other pandemic-related issues. Now is the time to discuss with clients their potential for risk exposures in areas that aren’t typically included in a business’s general liability insurance policy, such as management and professional liability.

At Worldwide Facilities, our wide market reach and expertise can help you provide your business clients with the coverage they need to better mitigate exposure to employment-related risks.

To learn more, please contact Michele Epstein at mepstein@wwfi.com or 818-578-4402.

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