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.
