Pandemic-related challenges continue to plague employers who have been eager to return to business as it used to be, but the reality is that the workplace has changed. Mitigating the risk of potential challenges with advance strategic planning and policy implementation to respond proactively, rather than impulsively, reinforces business continuity.

COVID-19 has impacted almost every aspect of a company’s operations, and no organization is immune. Human resource managers and risk managers are scrambling to interpret, understand, and comply with the new employer laws and legislation, parameters, requirements, guidance, and recommendations — revisions often occur daily.

Many employers will face virus-related workers’ compensation claims with coverage determinations focused on whether the employee contracted the virus in the workplace. However, Workers’ Compensation will only respond to an employee work-related bodily injury or illness claim.

The COVID-19 pandemic caught the world off-guard, unprepared, and vulnerable. Employers can undoubtedly expect traditional employment related claims such as wrongful termination, retaliation, wage-and-hour violations, failing to provide the requisite notice under the WARN Act prior to company layoffs, OSHA violations, and a host of unconventional claims.

Re-opening business guidance to implement safety protocols within the workplace, temperature screenings, invasion of privacy concerns if employees are questioned about personal travel or activities, failure to accommodate leave requests, lack of provided PPE, emotional distress, and many others not yet identified could give rise to such claims. As more organizations reopen in the absence or lessening of restrictions, employers will likely begin to see an increase in lawsuits.


Employment Practices Liability Insurance (EPLI) covers businesses against claims by workers that their legal rights as employees of the company have been violated.

The number of lawsuits filed by employees against their employers has been rising. While most suits are filed against large corporations, no company is immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP). An endorsement changes the terms and conditions of the policy. Other companies offer EPLI as a standalone coverage.

EPLI provides protection against many kinds of employee lawsuits, including claims of:
• Sexual harassment
• Discrimination
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plans

The cost of EPLI coverage depends on your type of business, the number of employees you have, and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit. Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as workers’ compensation are excluded from EPLI policies.

To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place:
• Create effective hiring and screening policies and procedures to avoid discrimination in hiring.
• Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
• Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on impermissible behavior.
• Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
[Source: Insurance Information Institute]

Not all policies are created equal and companies are advised to consult with their agent/broker to ensure their policy includes the broadest coverage available in the marketplace. Several circumstances pertinent to the COVID-19 pandemic where coverage may be problematic are of utmost importance to how your company’s EPLI policy will respond.


Louise Esola, in her Business Insurance online article, “COVID Workplace Suits Increase: Reports,” cites the 43 percent of COVID-19-related workplace lawsuits, initiated between employees and employers, that were filed in June, according to data collected by the Fisher Phillips LLC law firm. The two types of COVID-19 claims filed most frequently are employment discrimination claims and work-from-home/employee leave claims.

Since the advent of COVID-19, employers have been introduced to:
• The Coronavirus Aid, Relief, and Economic Security (CARES) Act
• Families First Coronavirus Response (FFCRA) Act
• Paycheck Protection Program (PPP) Loans
• Economic Injury Disaster Loans (EIDL)

This, in addition to new rules and regulations from:
• U.S. Centers for Disease Control and Prevention (CDC)
• Department of Labor (DOL)
• U.S. Equal Employment Opportunity Commission (EEOC)
• U.S. Department of Health and Human Services (HHS)
• Internal Revenue Service (IRS)
• Americans With Disabilities Act (ADA)
• The Job Accommodation Network (JAN)
• U.S. Occupational Safety and Health Administration (OSHA)

The above does not include state and local government initiatives. Navigating the list of resources, combined with self-quarantine and stay-at-home orders, increased the need for employee mental-health awareness.

In this new virus era, human resource managers and compliance are a critically important partnership to disseminate new or revised company policies and procedures, advocate employee health and safety, communicate company leadership initiatives, and maintain transparency as well as ensure employer federal and state compliance.

The federal government continues to update, revise, and clarify legislation passed to address COVID-19’s effects on businesses.


COVID-19 meets racism, discrimination, inequality, and injustice. Black and Asian Americans are more likely than other groups to be the subject of slurs, jokes, and harassment because of their ethnicity or race. Asian adults are the most likely to say this has happened to them since the beginning of the Coronavirus outbreak. About three in 10 Asian adults (31 percent) say they have been subject to slurs or jokes because of their race or ethnicity since the outbreak began, compared with 21 percent of Black adults, 15 percent of Hispanic adults, and 8 percent of white adults.

This aligns with some reports of incidents if discrimination against Asian Americans since the virus outbreak first emerged in China and then started spreading in the United States.

These are among the findings of a Pew Research Center survey of 9,654 U.S. adults conducted June 4-10, 2020, using the center’s American Trends Panel.

Employers have a duty to protect employees from harassment and discrimination in the workplace. Federal and state laws, regulations, and court decisions have made it clear that employers should provide anti-harassment and anti-discrimination training to all employees in all states.

With new mandates, social movements like #METOO and Black Lives Matter, and employee expectations of their employer, compliance training is now more important than ever to mitigate risk and exposure to employment-related lawsuits.

In a perfect world, we would all possess cultural awareness and acknowledge

and accept that our differences create an environment with a wide range of backgrounds and mindsets. This allows for an empowered company culture of creativity and innovation.

A company committed to a discrimination- and harassment-free work-environment policy should outline types of prohibited conduct, circumscribe procedures for reporting and investigatingsuch conduct, and include corrective and disciplinary action.

Company Policy Against Discrimination and Harassment – General Practices

• Purpose
• Protected Status
• Recruitment, Hiring, and Promotion (EEO Principles)
• Coverage
• Corrective Action
• Prohibited Conduct
• Sexual Harassment
• Employee Responsibility

Company Diversity and Inclusion Policy – General Practices
Some types of diversity are as follows:
• Life Experience
• Work Experience
• Perspective
• Culture
• Ethnicity
• Gender
• Age

Encourage and welcome diversity, recognizing it as a key competitive advantage. Understanding and embracing what each employee’s background and perspective can contribute gives your company a cutting edge. Respecting each individual and recognizing the value that each brings to the team is essential. By creating a supportive environment that allows everyone to perform to his or her potential, you achieve success.

Company leadership establishes company culture. Employ your words, your actions, and your influence to stop the use and tolerance of xenophobic language and racist behaviors.


Of course, none of us know if or when a second wave may occur, whether it will be as bad as the first, or worse. Will its impact follow suit, affecting different regions at different times and in varying capacity?

Experiencing the first round provides an opportunity to an insightful review of your organizational risks. The reopening guidelines risk assessment is an excellent resource to follow:
• Identify
• Evaluate
• Assess
• Control
• Monitor

Maintain workplace safety to prevent the spread of the virus using OSHA and CDC guidelines, which include:
• Hand hygiene
• Encourage social distancing
• Perform routine environmental cleaning and disinfecting
• Utilize personal protective equipment (PPE)
• Implement administrative controls
• Consider implementing engineering controls that apply to your type of car wash operations
• Be adaptable

If you plan to conduct employee screenings to identify potentially ill employees, consider the EEOC guidelines for employer procedures:
• Measure body temperatures prior to entry
• Nondiscriminatory basis
• Medical information remains confidential
• Policy and procedure transparency
• Be consistent


The COVID-19 pandemic has complicated the employer landscape even further amid an already exponential growth in the number of lawsuits filed by employees. While an essential coverage tool, EPLI policies are not all-encompassing. They commonly exclude criminal or civil fines, penalties or punitive damages, bodily injury and property damage claims, state unemployment insurance claims, workers’ compensation claims, and claims filed under the Fair Labor Standards and Occupational Safety and Health Acts.

According to industry experts, retaliation and sexual harassment claims, gig worker classification, the gender pay gap, and medical marijuana usage are among the top trending employment practices litigation cases in 2020. Moreover, the average cost of employment-related claims is rising, along with the length of time it takes to resolve a claim.

One of the more startling employment practices liability insurance statistics is that more than half of EEOC claims filed in 2018 involved claims of retaliation followed by #METOO Movement related claims.

EPLI Coverage Statistics: A Big Concern for Small Businesses

Understanding your employees’ rights is paramount to protecting your business. During FY 2018, the EEOC resolved 90,558 charges of employee discrimination, securing $505 million for victims in both the private sector and government workplaces. More than 40 percent of EPLI-related lawsuits are filed against private companies with fewer than 100 employees.

Other notable employment practices liability statistics illustrate the importance of EPLI insurance:
• In FY 2018, the EEOC fielded over 200,000 inquiries regarding potential discrimination claims.
• The EEOC received more than 7,600 sexual harassment charges in FY 2018.
• The average cost of settling out of court for an employment claim is $75,000.
• The average jury award for an employment-related case is $217,000.
• The average duration of an employment claim spans more than 300 days.
[Source: AmTrust Financial online article, “Employment Practices Liability Insurance (EPLI): Top Trends for 2020”]

If you have additional questions, which are not covered in this article, seek the expert advice of an industry specific insurance agent/broker who understands the complexity and exposures of car wash operations. An agency with the necessary tools and resources along with a risk assessment of your car wash organizational operations can provide a starting point to assist with risk mitigation and the continued success of your car wash.


Kimberly Grizzle, AAI is The Insurancenter’s brand marketing and business development strategist. Kimberly is an accredited advisor in insurance with over 25 years of experience in the risk mitigation and insurance industry. Based in Joplin, MO, The Insurancenter is the largest writer of car wash insurance nationwide since 1986. You can visit the company on the web at or call (800) 444-8675.