COVID-19 Is Officially a Pandemic. What Now?

With the World Health Organization (WHO) now calling COVID-19 a global pandemic, many businesses are wondering what it means for them. The answer: Not much, from a practical standpoint. But it’s a reminder that this global health crisis is significant — and that a proactive response is essential.

Symbolic Meaning

As WHO Director-General Dr. Tedros Adhanom Ghebreyesus said Wednesday, characterizing COVID-19 as a pandemic does not change the organization’s view of the threat. But the move has enormous symbolic connotations.

It makes clear to everyone worldwide that the current crisis rivals H1N1 — the last event to be designated a pandemic — and other recent large-scale infectious disease events in scope and size.

The WHO’s announcement could prompt more extensive responses from national and local governments in the US – which has now declared a national emergency – and elsewhere. And it reflects the view by governments and the global health community that although containment of the virus may still be possible in some areas, the focus going forward must be on mitigation.

Insurance Coverage

A critical question for businesses is whether commercial insurance policies respond differently with the pandemic designation. Generally, the answer is no.

By and large, whether an infectious disease event is considered an outbreak, epidemic, or pandemic, the same considerations apply for casualty, property and business interruption, environmental liability, directors and officers liability, employment practices liability, and credit insurance. Some of these policies may offer businesses protection in the event of claims and/or litigation brought by employees, customers, shareholders, and others. Workers’ compensation policies, for example, could apply if an employee contracts COVID-19, but the facts of a particular case will determine whether an illness is compensable.

It's important to note, however, that traditional forms of coverage often provide limited coverage for the effects of infectious disease events. Risk professionals should review their policy language and discuss with their brokers and claims advisors how specific policies may respond to various scenarios and circumstances.

Be Proactive

If nothing else, the pandemic designation is a reminder that businesses need to take COVID-19 seriously and shift from planning to response mode.

Among other actions, businesses should:

• Think ahead. What critical issues need to be addressed now, next week, and next month? What worst-case scenarios should be prepared for? And what resources are needed to manage risk?
• Enable social distancing. This is critical as the focus shifts to mitigation. Among other steps, employers should consider encouraging employees to telecommute and dividing critical teams by shifts and between sites.
• Keep employees updated. A lack of information can feed anxiety and fear. Communicate regularly with employees about the status of the pandemic, steps being taken to keep them safe, and aid being offered as the pandemic continues.

The bottom line: COVID-19 should not be taken lightly. To manage the risks to people and operations, businesses must act now and be proactive as the pandemic persists.