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COVID-19, Workers Compensation Immunity, and Coverage under Commercial General Liability Insurance Policies

December 18, 2020

There will be employees who contract the coronavirus and claim they were infected by a fellow-worker at the jobsite or in the office.  Then these employees will bring a personal injury suit against their employer to recover money damages or, in the case of a fatality, their estate will bring a wrongful death action against the employer.  This article outlines proposed legislation in the Congress and in the Virginia General Assembly that, if enacted, will allocate some of the risks and responsibilities for litigation brought by employees who believe that they were infected by COVID-19 in the workplace.

In Virginia, legislation has been introduced, in the form of House Bill 5028,  to amend the Virginia Workers Compensation Act to extend coverage under the Act to the  disability or death  of certain listed high risk workers who contract the disease while performing their work.  Such legislation, if enacted, would shield employers from exposure to personal injury or wrongful death lawsuits brought by employees but would require the employer to furnish to the employee the remedy afforded by the Workers Compensation Act.  But such legislation would not apply to all categories of employees.  It would be limited to certain listed high-risk workers.  Employees outside of this category who were infected by coronavirus while at work would retain the ability to sue their employer by advancing the theory that the employer failed to properly protect them from the disease at work.  We of course recognize that public health authorities have issued recommended measures for employers to use to protect employees or minimize their risks of getting the disease.  Even if such measures are mandatory, and even if the employer fully implemented them, it is unclear whether the employer will prevail in a COVID-19 related lawsuit.  And even if the employer does prevail, there remains substantial amount of legal fees spent defending against the suit. 

Federal legislation has also been proposed.  However, such legislation, if enacted, may not resolve whether COVID-19 lawsuits would be precluded by law under the applicable workers’ compensation act.  

Employers typically seek to insure against these types of exposure.  That is, employers use insurance to not only cover them against the risk of a large monetary judgment for personal injury or death, but also to cover them for legal fees and costs of defending any such action.  The insurance product on which employers rely for these types of coverage is the commercial general liability insurance policy.

This brief article will address these various issues under current Virginia law.  Nevertheless, because there is much uncertainly at this time as to how the courts will deal with  litigation related to COVID-19 and its impact on existing law, plus the possibility of new legislation, readers are cautioned that the conclusions reached in this article are  those of the writer only and are based on the current law in Virginia without guidance from any court who had these issues before it.  [1]

COVID-19 will most likely not be considered to be an “Occupational disease” under the Virginia Workers Compensation Act. 

Virginia Code §65.2-400 defines "Occupational disease" as follows: 

A. As used in this title, unless the context clearly indicates otherwise, the term "occupational disease" means a disease arising out of and in the course of employment, but not an ordinary disease of life to which the general public is exposed outside of the employment.

B. A disease shall be deemed to arise out of the employment only if there is apparent to the rational mind, upon consideration of all the circumstances:

1. A direct causal connection between the conditions under which work is performed and the occupational disease;

2. It can be seen to have followed as a natural incident of the work as a result of the exposure occasioned by the nature of the employment;

3. It can be fairly traced to the employment as the proximate cause;

4. It is neither a disease to which an employee may have had substantial exposure outside of the employment, nor any condition of the neck, back or spinal column;

5. It is incidental to the character of the business and not independent of the relation of employer and employee; and

6. It had its origin in a risk connected with the employment and flowed from that source as a natural consequence, though it need not have been foreseen or expected before its contraction.

Virginia Code § 65.2-401 also defines "Ordinary disease of life" as:

An ordinary disease of life to which the general public is exposed outside of the employment may be treated as an occupational disease for purposes of this title if each of the following elements is established by clear and convincing evidence, (not a mere probability):

1. That the disease exists and arose out of and in the course of employment as provided in § 65.2-400 with respect to occupational diseases and did not result from causes outside of the employment, and

2. That one of the following exists:

a. It follows as an incident of occupational disease as defined in this title; or

b. It is an infectious or contagious disease contracted in the course of one's employment in a hospital or sanitarium or laboratory or nursing home as defined in § 32.1-123, or while otherwise engaged in the direct delivery of health care, or in the course of employment as emergency rescue personnel and those volunteer emergency rescue personnel referred to in § 65.2-101; or

c. It is characteristic of the employment and was caused by conditions peculiar to such employment.

Under the foregoing definitions of “Occupational disease” and “Ordinary disease of life,” it is unlikely that COVID-19 will be considered to be  an “Occupational disease” but,  instead, it will most likely be considered to be  an “Ordinary disease of life” even though it may have been contracted during employment with  the exception of the disability or death from the disease of any of those high risk employees enumerated in recently introduced House Bill No. 5028,  in the event such bill is passed.

Recently Introduced Virginia Legislation may bring COVID-19 within the Definition of “Occupational disease” for Firefighters, Police and other Correctional Employees, Health Care Workers, First Responders, and Teachers whose Disability or Death is caused by COVID-19

Under Virginia Code §65.2-402.1, there is a presumption that hepatitis, meningococcal of, tuberculosis, or HIV, which causes the death or disability of police officers employed by listed state and local public bodies, firefighters, volunteer emergency medical services personnel, and certain other correctional employees of other listed public agencies, is an occupational disease.  Although COVID-19 is not presumed to be an occupational disease under Virginia Code §65.2-402.1, House Bill No. 5028, offered on August 18,2020, if enacted, would amend §65.2-402.1 to add a similar presumption for firefighters, law enforcement officers, health care providers, school board employees and first responders, whose death or disability is caused by COVID-19. So any of the employees listed whose work is such that they are  more likely to be exposed to the virus may have to overcome the presumption that their disability or death  was caused by an Occupational disease and thus their remedy is limited to the benefits allowable under the Virginia Workers Compensation Act . In the case of the disability or death of employees, other than those enumerated in Virginia Code §65.2-402.1, or as it may be amended, plaintiffs will not be faced with the defense that  the death or disability of the employee from COVID-19 is presumed to be covered is by workers compensation and  for this reason it must be dismissed.

Under the usual form of a Commercial General Liability Insurance Policy there should be coverage for both Defense Costs and Indemnity Against Liability and damages for an action in Negligence for Personal Injury, Disease or Death resulting from COVID-19 if all conditions of the Policy can be met.

An  insurance company issuing a CGL policy is required to defend and pay the insured’s defense costs if the allegations in an underlying action potentially fall within the coverage of the policy,  and in some cases the insured may go beyond the complaint allegations to trigger the insurer’s duty to defend.  This duty does not depend upon the truth of the allegations nor the outcome of the litigation; the duty is triggered even if the allegations are false or fraudulent.  In upholding the duty to defend, a court will look at the legal theories of the complaint and not the actual conduct alleged. 

A CGL policy is intended to cover injuries to both persons and property. Moreover, where there is a likelihood of coverage an organization known as The Insurance Services Office, Inc. (“ISO”) provides standard forms of policies and endorsements so that the provisions of CGL policies issued in Virginia will frequently have very similar or identical provisions.  In addition, the ISO is an advisory organization for the insurance carriers regarding adoption and modification of the ISO forms to address the risks and unique requirements of industries.  The terms of the CGL policy used will govern coverage on a claim.

The initial burden on a claim made under a policy rests on the insured; the insured must show that the injury is covered under the terms of the CGL policy.    After that burden is met, the burden shifts to the insurer to prove an exclusion to coverage.

While a CGL policy may have exclusions for things like, for example, illness from mold, or damages due to acts of domestic terrorism, the writer is not aware that any CGL insurance company has added an exclusion for COVID-19 disease or death.  But, do not be surprised if your carrier seeks to add this type of exclusion.  Employers should be especially alert to such developments when a CGL policy is renewed.  To avoid being caught off guard, CGL policy holders should carefully review new policies issued in renewal of an existing policy to see if any endorsement has been added for such an exclusion.  However, unless the policy does contain such an exclusion, under current versions of most CGL policies, there should be coverage for defense costs and indemnification against liability for COVID-19 disease or death damages, provided that all the other terms and conditions of the policy can be met.  One critical condition may be whether the facts giving rise to the claim arose during the policy period. Proving this may not be easy because of the nature of COVID-19 and the ways this disease may be caught or spread and that its symptoms may not occur for a period after the occurrence of the contact which resulted in illness or death from it.

Workers Compensation Insurance 

In Virginia any employer having more than two employees must carry a policy of workers compensation insurance.  If the employer employs subcontractors for part of its work, it must count the number of such subcontractors’ employees in determining if it must carry such insurance. Coverage under payable workers compensation insurance will be similar to that under a CGL policy, limited to the amount of the benefits payable to the employee, or his or her estate under the Act.  But coverage applies in the case of injuries or death from an Occupational disease only  and until COVID-19 is considered to be such a disease, whether to the extent provided for by pending legislation or otherwise, there is no coverage under a workers compensation policy should a claim be made against the policy. 

To the extent, however, however that the Act may be amended, as proposed, to extend coverage under the Act to the disability or death of high risk employees who contract the disease,  employers may expect an increase in their experience ratio with a substantial  increase in the cost of their insurance if a substantial number of claims are made.


It is a sure thing that there will be COVID-19 litigation involving employees who contract the coronavirus and believe its source was a contact with a fellow-worker at the jobsite or in the office.  When sued, their employers will most likely turn to their CGL insurance carriers in the hope that the cost of defending the lawsuit, and indemnification against any judgment against employers, will be within the coverage of their CGL policies.  It can also be anticipated that there will be a difference of opinions among different courts who decide these issues, which my require legislation or a decision of  the Virginia Supreme Court, or the decision of the highest court in another jurisdiction, to resolve these issues.  Of course, there are many other issues created by COVID-19 having a greater importance and urgency.  Hopefully, a solution to all the problems created by this terrible disease will be found sometime soon.

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[1] As of the date of this article, the writer has not been able to find any decision of a court in Virginia dealing with these issues. However, there are a few opinions of the Virginia Workers’ Compensation Commission involving claims that contraction of COVID-19 was either a work- related injury or the result of an occupational disease.  Each of those claims were dismissed because of the claimants’ failure to prove, by clear and convincing evidence, to a reasonable degree of medical certainty, that claimant’s condition arose out of, and in the  course of claimant’s employment, and did not result from causes outside of claimant’s employment.  While the Commission did not opine that COVID-19 cannot be considered to be an occupational disease under any circumstances, its opinions do illustrate how difficult it will be for claimants who have contracted the disease to prove a claim for workers’ compensation benefits.