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DOL Issues Notice Poster of Employees' Rights Under the FFCRA and Guidance Regarding the Non-Enforcement Period

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COVID-19 Economic Resources for Small Businesses

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COVID-19 Related Business Interruption Coverage

COVID-19 Related Business Interruption Coverage 
MARCH 2020

Businesses across the country are temporarily closing their doors to customers, clients and employees to enforce social-distancing in an effort to slow the spread of the coronavirus. Some have done so voluntarily, asking employees to work from home or closing their store fronts and asking customers to order on-line. Others have closed completely or modified their service mechanism at the instruction of state and local government. Restaurants, bars, entertainment venues and others in the retail, hospitality and service industries have been hit particularly hard by these necessary steps to reduce the public exposure. 

The economic impact of these unprecedented steps immediately raises the question: Am I insured for this?The answer is that it will likely be difficult to obtain coverage, unless you have an insurance policy specifically designed to provide coverage for business interruption from pathogens or pandemics. Such policies exist, but coverage for these risks is generally not available under the standard property insurance policies most businesses buy. Here’s why. 

The standard commercial property insurance policy requires the insured premises to be actually damaged by a covered loss to trigger business interruption coverage. Standard business interruption coverage requires a suspension of operation caused by “direct physical loss” to the insured premises. 

Theoretically, because the virus can live on surfaces for a period of time, there could be an argument for necessary suspension from “direct” damage if there is evidence of actual contamination. Some courts have reached similar conclusions in other circumstances. But most businesses will close or limit operation to avoid contamination and spread, not because of it. Even if there is some contamination, the coverage would likely be limited in time. Business interruption policies only cover income loss during the period of restoration. That period ends when the property is or should be restored. A business can be decontaminated fairly quickly, so any damage caused by “contamination” would not require a long suspension. Many policies also require a waiting period of up to 72 hours before coverage starts, so coverage would be further limited by this waiting period.  

Civil authority is a separate type of business interruption coverage that applies when a business is closed or limited by governmental action. However, the governmental action must stem from direct covered damage to another property near the insured premises which prohibits access to the insured business. Some policies require damage in the “immediate” surrounding area, while some give a set distance away. In any event, there must be some relationship between an otherwise covered loss at nearby property and the limitation of access to the insured business. A general lockdown would likely not be sufficient. 

Even if there is contamination at the insured business or closure based on actions of civil authority from contamination, damage from the virus will be explicitly excluded under many policies. Exclusions for viral contamination were placed in many policies more than 10 years ago following other pandemics. Older policies or non-traditional policies may not have this exclusion, so always check the policy language to see if there is an argument for coverage. 

Although coverage for this event is unlikely under standard policies, coverages vary based on the form used and the carrier. We always recommend having a professional review the specific policy language to determine if there is a potential for coverage. Because the policy will limit the time for making claims, insureds and carriers should always review specific scenarios against the policy language and applicable law and timely make a claim if there is the potential for coverage. 

We also expect policyholders to challenge some of these provisions in court. At least one suit seeking coverage for a restaurant closed by the actions of the State of Louisiana has been filed in New Orleans. HAHS will monitor the progress of this and other coverage suits as the law regarding coverage for this pandemic develops.  

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10 Tips to Minimize Cyber Threats on Your Business

10 Tips to Minimize Cyber Threats on Your Business

In this unprecedented time of social distancing, businesses across the globe must rely on their employees working remotely.  In this environment with unique business challenges and everyone’s attention on the Coronavirus, the risk of cyber threats is grave as businesses rely more extensively on electronic communications, online business transactions, and isolated employees to continue to function during this pandemic.  Numerous cyber breaches and scams have proliferated in this environment.  The HAHS cybersecurity team cautions all businesses and employees to remain vigilant of these evolving cyber threats.  Below are ten tips businesses and employees should consider during this unusual time: 

  1. Continue to follow policies and procedures. To the extent the business has cybersecurity and technological policies and procedures in place, they should not be cast aside simply because of the new work environment.  Established steps for safeguarding credentials, logging in to VPN, limitations on email and social media use, changing of passwords, verification for email messages, standards for use of personal devices, and other similar security protocols should be adapted to current business operations.  If the business does not have any policies, procedures, limitations, or guidelines on these and other areas for remote operations, they should be developed and implemented immediately. 
  1. Dual-factor authentication and extra layers of verification remain crucial. Bolster the security of electronic financial transactions and login credentials with the use of dual-factor authentication.   Use layered and redundant levels of verification to confirm EFTs, wire instructions, and payroll details.  Urgent requests for immediate action or requests outside of established procedures should be a red flag and investigated thoroughly before any response is made or action taken. 
  1. Remain vigilant for phishing emails.  With the wave of COVID-19 updates email traffic, and dependence of email communications for those working remotely, cyber criminals have capitalized on the opportunity to trick unwary email recipients to click on malicious links or attachments to infect the computer with malicious content.   Do not trust auto-populated sender names, and hover over the sender to confirm the email address is legitimate.  Do not click on links or download attachments in emails that are unexpected or unverified.  With the increase in the amount of conference and video calls, extra precautions should be taken to authenticate invitations or connection instructions before clicking a link.  Verify emails by speaking to the sender directly on the phone to confirm unexpected or suspicious emails are legitimate. 
  1. Be on the lookout for fake websites with COVID-19 related content.  There have been widespread instances of fake domains and websites formed to draw internet traffic and unsuspecting victims, mimicking legitimate websites.  For example, a phony website mimicking the Johns Hopkins University’s map of confirmed COVID-19 cases was created and infected users with malware.  Other fake websites spoofing government, healthcare, and insurance providers have become prevalent.    
  1. Investigate what impact the change to business operations has on commercial insurance, in particular, cybersecurity coverage. As more businesses have employees working remotely, the question should be raised to insurance professionals how coverage may be impacted by the change in business operations.  Some coverage issues may involve whether commercial coverage extends to personal devices used by employees working remotely, the impact on cybersecurity coverage by the modified working environment, and what exclusions or limitations may be triggered in this new business environment. 
  1. Home devices must be secure.  Ensure passwords, firewalls, virus protection, patches, and other safeguards are current and regularly updated on home routers, computers, and wifi.  Many routers and other devices come with default passwords that can be located searching the internet so be sure to change and update all passwords. 
  1. Children should not use business devices. With children out of school, avoid the temptation to allow children to play games and watch videos on business devices.  While the peace and quiet of a distracted child may seem like a good idea, that tranquility will be destroyed if a virus or malware infects the device due to the child accessing unsecure websites, popups, links, or videos.   The more unnecessary website searches and internet traffic to your business device, the greater risk of picking up malicious content, especially if the child is allowed unfettered access to the device. 
  1. Working remotely does not excuse violations of privacy, security, or consumer protection laws.  While this business environment is like nothing we have ever experienced, it does not justify violation of privacy, security, and consumer protection laws.  The legislature may enact certain exclusions and limitations to address this current business environment to some extent, but expediency or efficiency cannot replace common sense and information safeguards.  Emails with sensitive business or protected information should be encrypted and transmitted in accordance with applicable standards and laws.   Individuals’ PII, PHI, and financial and confidential information must continue to be safeguarded.  Global pandemic or not, liability and regulatory penalties could follow those that cut corners or ignore mandatory requirements. 
  1. Avoid public or shared wifi. Even though people are likely avoiding coffee shops and other public locations with free wifi, some individuals will continue to use public or shared wifi, even for business matters. When at all possible, use company supported VPN and secured sources of internet to conduct business and financial matters. 
  1. Remote working does not mean zero communication. Vigilance and immediate communication with IT professionals are of the utmost importance, especially for unusual activity.  Report any phishing emails or other questionable activity to your IT professional so they can verify, notify other users, and/or block the sender if possible.  

While the COVID-19 pandemic has interrupted the usual method of business operations, remote working, conference and video calls, and the use of technology will help businesses continue to operate and function.  With a little extra attention and caution, employees working remotely can thrive and continue to be productive during this new age of business operations.  If our cybersecurity team can provide any assistance in the implementation of policies and procedures, conduct presentations or trainings (remotely) on best practices, or assist in the investigation or response to a cyber breach, please do not hesitate to contact us.

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Families First Coronavirus Response Act (FFCRA) is Passed by the House and Senate, Will Require Employers with Fewer Than 500 Employees to Provide Paid Leave

Families First Coronavirus Response Act (FFCRA) is Passed by the House and Senate, Will Require Employers with Fewer Than 500 Employees to Provide Paid Leave

March 18, 2020, 4:00 p.m.

The Senate just passed the Families First Coronavirus Response Act (FFCRA), previously passed by the House on Monday, March 16.  It is now headed to President Trump for signature and will go into effect soon. Here are the key aspects of the Bill for employers to be aware of:

  • Expansion of FMLA: This law expands FMLA coverage on a temporary basis to any workplace with fewer than 500 employees, and covers employees who have been working for at least 30 calendar days prior to the leave (rather than a year). 
    • It provides for up to 12 weeks of leave (partially paid, except for the first two weeks, which is covered by the paid sick leave provision below) for employees who are unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency.
      • “Child care provider” means a provider who receives compensation for providing child care services on a regular basis, including “eligible child care provider” as defined by 42 U.S.C. § 9858n.
      • “School” means an “elementary school” or “secondary school” as such terms are defined in 20 U.S.C. § 7801.
    • The first 14 days are “unpaid” (but see below) and employees can use other available paid leave. After the first 14 days, employees must be paid at 2/3 the regular rate of pay, up to $200/day and $10,000 in the aggregate.
      • For part-time employees, employers must calculate the appropriate leave using an average hours/day over the previous six months, or if not possible, the average number of hours per day the employee is normally scheduled to work.
    • Exceptions may be granted by the Department of Labor to small businesses (less than 50 employees) if they demonstrate hardship (if this paid leave would “jeopardize the viability of the business”), and for health care providers and emergency responders. Once this bill is enacted, regulations and procedures for making such requests are expected to be quickly issued.  
    • Because this is a temporary expansion of FMLA, be mindful of potential interference and retaliation claims for violations of this law.
    • A tax credit will be available for these leave payments.
    • All aspects of this FMLA expansion expire at the end of calendar year 2020.
  • Paid Sick Leave:
    • Employers with fewer than 500 employees are required to provide full-time employees up to 80 hours of paid sick leave (up to $511/day, $5,110 in the aggregate), or 2/3 pay if caring for a family member or child home from school (see (4) (5) and (6) below) for circumstances related to COVID-1 because:
      • (1) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
      • (2) the employee has been advised by a health care provider to self-quarantine because of COVID-19;
      • (3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
      • (4) the employee is caring for an individual subject or advised to quarantine or isolation;
      • (5) the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
      • (6) the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
    • Employees are immediately eligible for this paid leave, regardless of tenure.
    • Small businesses with fewer than 50 employees and health care providers/emergency responders may be entitled to a hardship exemption.
    • Part-time employees get the number of hours they worked on average in the prior six-month period, per day, or the reasonable expectation of the employee at the time of hiring regarding the number of hours per day.
    • This paid sick time shall be made available in addition to any paid leave already provided to employees. (And employers cannot change their sick leave policies to avoid this “add-on.”)
    • This applies to all “public agency” employers, regardless of number of employees.
    • This law also expires at the end of the 2020.
    • There will be a tax credit to employers on payroll taxes for sick leave paid. 
  • People who are self-employed: People who are self-employed but work for another employer (such as Lyft/Uber), will be eligible for a tax credit of up to two weeks of sick pay at their average pay (capped at $511/day) if they are sick or, if caring for a family member, 2/3 of pay.

The legislation automatically goes into effect 15 days after enactment, but it may go into effect sooner than that at the discretion of the Treasury Secretary.

Please contact the lawyer you regularly work with regarding questions about how this legislation applies to you, or the author of this summary, Christine Hart, at This email address is being protected from spambots. You need JavaScript enabled to view it. or (251) 694-6358.

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