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Return to office could usher in a wave of employee lawsuits

When hiring a new employee, there’s a lot to think about, from onboarding to security. But there’s also the ever-constant risk of a lawsuit—and according to recent data, insurers may want to brace for a new wave of them.

Man walking into an office holding a face mask and briefcase.

With employers asking their employees to return to the office, employee lawsuits are on the rise.

In the decade before the pandemic, the average annual frequency of claims for employment practices liability (EPL) – which typically address exposures related to wrongful termination, negligent hiring or supervision, employment-related privacy violations and other similar exposures – was trending downward by around 4.1 percent, while the severity, or overall size, of these claims had increased slightly by about 1.8 percent. But as of March 31, 2021, that frequency trend had increased by nearly 5 percent, according to our analysis of ten report years worth of EPL claims reported into the ISO Statistical Database.

COVID-19’s potential effect on EPL claims

Whether this increase is the result of COVID-19’s effect on the workplace is hard to say, but at this stage of the pandemic, the downward trend of EPL claims has reversed, and we do know that the pandemic drastically changed the way most American workplaces looked.

According to a recent analysis of case data, COVID-19 litigation cases are on the rise, and the most common case type relates to employment discrimination.1

Some examples of potential COVID employment claim risks include employees who allege:

  • They contracted COVID-19 at the office due to lack of safety equipment.
  • Their employer violated their privacy by sharing their medical status with a contact tracer.
  • They were fired because of their refusal to comply with management’s COVID-19 policies.
  • They suffered psychological injury when they were forced to return to work with the threat of getting sick looming.

Remote work issues driving lawsuits

One potential driver of future EPL claims? The new norms around remote work and leave. For people who have been working remotely for the past year or longer, a request to return to the office could be interpreted as a threat to their health.

If an employer has failed to create a safe work environment, and has required employees to return to the office and in turn endangered their health, it could face a lawsuit. Even if an employer feels it's taken the necessary precautions to protect its employees, a lawsuit could potentially contest that.2 3

Smaller companies at risk of lawsuits related to vaccine mandates

On September 9, President Joe Biden announced that he was directing the Department of Labor to draft a rule that will generally require all businesses with 100 or more employees to mandate that their employees get the vaccine or undergo weekly COVID testing. Companies that violate the rule could be subject to fines of $14,000 per violation.4 The U.S. Supreme Court has since blocked the Biden administration’s vaccine mandate but has allowed a separate mandate that applies to healthcare workers at federally-funded facilities.5 These rulings may be challenged in the future.

Insurers may want to reach out to smaller and larger companies, where a vaccine mandate is not required, to discuss their EPL coverage, because they may want to prepare for potential lawsuits related to any employer-imposed vaccine mandates that are not required by law.

Looking toward 2022

Insurers should be on the lookout for an increase in potential lawsuits as huge swathes of people return to in-office work.

Insurers may want to know that their insureds are complying with all office safety guidelines and vaccine mandates, whether governmental or non-governmental, in order to protect their employees’ health and their company. Work on Verisk’s next regularly scheduled EPL loss cost review will commence starting the second half of 2022, and any potential loss cost adjustments due to the impact of COVID-19 will be evaluated as part of the review process.

You can get more actuarial insights like this by subscribing to Verisk’s Actuarial and Strategic Data Insights.


Ajay Marathe

Ajay Marathe is a Lead Financial Lines Actuary at Verisk. He can be reached at Ajay.Marathe@Verisk.com.


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  1. COVID-19 Employment Litigation Tracker And Insights, Fisher Phillips, <https://www.fisherphillips.com/innovations-center/covid-19-employment-litigation-tracker-and-insights.html>, accessed on December 7, 2021.
  2. Carolyn Cohn, Noor Zainab Hussain, Kirstin Ridley, “Insurers worry about COVID-19 discrimination claims as workers return to desks,” Reuters, August 6, 2021, <https://www.reuters.com/business/insurers-worry-about-covid-19-discrimination-claims-workers-return-desks-2021-08-06/>, accessed on December 7, 2021.
  3. Contessa Brewer, “Insurers brace for lawsuits as workers return to the office,” CNBC, May 7, 2021, <https://www.cnbc.com/2021/05/07/insurers-brace-for-lawsuits-as-workers-return-to-the-office.html>, accessed on December 7, 2021.
  4. Fact Sheet: Biden Administration Announces Details of Two Major Vaccination Policies, White House Briefing Room, November 4, 2021, <https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/04/fact-sheet-biden-administration-announces-details-of-two-major-vaccination-policies/>, accessed on December 7, 2021.
  5. Alexis Keenan, “Supreme Court blocks vaccine mandate for large businesses, allows it for health care workers,” Yahoo Finance, January 13, 2022, <https://www.cnbc.com/2021/05/07/insurers-brace-for-lawsuits-as-workers-return-to-the-office.html>, accessed on January 14, 2022.

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