Who pays when someone on a construction site gets sick or dies from COVID-19? Long after the pandemic has passed from headline news, lawyers for plaintiffs and defendants will be battling over this issue. But I see a more immediate question: What can contractors do right now to avoid COVID claims?
Rule of thumb: Occupational injuries are covered by workers’ compensation insurance. All states require that employers carry workers’ comp. Scope of coverage varies by state. But workers’ comp in every state covers occupational hazards. No doubt in my mind, COVID is an occupational hazard on construction sites. Crews have to work together, sometimes in confined spaces and often sharing tools. Expect any employee who gets COVID on the job to have a claim likely to be settled by the workers’ comp system. A contractor has no liability for that work-related injury because worker’s comp is an exclusive remedy. In return for automatic coverage, employees give up the right to sue their employer.
But There’s a Loophole
In most states, an employee can still sue for on-the-job injury if the contractor’s conduct was “deliberate”, creating a substantial certainty that injury or death would result. That’s a high hurdle but is likely to become an issue in future claims. In a case filed last month (Toney Evans v. Walmart), a Walmart employee died of COVID. The employee’s estate claims Walmart knew sick employees were coming to work. Walmart didn’t isolate infected employees, didn’t disinfect the store and failed to follow guidelines from the CDC.
It's easy for construction contractors to stay out of the “deliberate” category and thus avoid liability. Get a copy of the CDC standards for construction workers and follow the CDC recommendations.
What About Liability to Subs?
Most work on construction sites, especially on residential jobs, is done by subcontractors. Any sub with employees has to have worker’s comp insurance. But many subs are small firms, often a sole proprietor with no employees. Most states don’t require the self-employed to buy workers’ comp insurance. So, a self-employed sub infected with COVID on your job could have a liability claim against your company – for both medical treatment and time lost from work. That could be expensive. Your workers’ comp policy isn’t going to help. Workers’ comp covers only employees, not your subs. So how do you protect yourself? The answer is in your subcontracts.
Written subcontracts can:
- Require subs to provide workers’ comp coverage for everyone on the job.
- Require subs do the same in every sub-sub contract they write.
- Include an indemnity clause that makes the sub responsible for damages resulting from the negligence "in whole or in part" of either the subcontractor or a sub-subcontractor
It’s too soon to know how much liability for COVID losses on construction sites will fall on contractors. Politicians in Washington DC and state capitals are wrestling with employer liability for pandemic losses. But your contracts can protect against COVID-19 losses right now, no matter what the politicians decide. To draft subcontracts that protect against the unexpected, have a look at Construction Contract Writer. The trial version is free.