Is There Coverage For Suits Based On Transmitting COVID-19?

Has one of your policyholders, or one of their employees, been sued for transmitting COVID19? This article briefly looks at coverage for third-party claims.

The standard Commercial General Liability Coverage Form does not contain an exclusion for “bodily injury” “which arises out of the transmission of a communicable disease by an insured person.” The most relevant exclusion in the standard Commercial General Liability Coverage Form is the “Expected or Intended Injury” exclusion and it may only apply to “bodily injury” expected or intended from the standpoint of the insured. Whether this exclusion applies may turn on whether the insured employer or employee knew or had reason to know of the infection.

The defendant employee may turn to an employer’s CGL coverage for defense and indemnity whether or not the employer has also been sued. The “Who is An Insured” section of the standard Commercial General Liability Coverage Form provides that the employer’s “volunteer workers” “while performing duties related to [the named insured’s] business” and “employees” are insured under the employer’s bodily injury liability coverage “but only for acts within the scope of their employment by you [the employer] or while performing duties related to the conduct of your [the employer’s] business.” As a result coverage may turn on whether the exposure came on the job or off of it, which may be difficult to figure out after the fact.

Liability will ultimately come down to whether the plaintiff can prove causation in addition to negligence or the absence of reasonable care. This will be difficult because of the long exposure window for the virus and the possibility that the plaintiff was exposed to the virus from other sources even if the defendant tested positive and interacted with plaintiff.