Author: Chris Boggs

Questions swirl around the available COVID vaccines. Some are medical questions and some are legal questions. The most common legal question is, “Can employers require the vaccine?"

An employer's legal ability to require the vaccine is outside the scope of this article; employment attorneys are the most qualified to answer this question. This article's focus is the insurance implications if the vaccine is mandated by the employer.

Even if the employer can legally require employee vaccinations, employers must consider all relevant factors arising from the decision before making a final decision. Insurance and the availability of coverage is a financial reality that must be considered as part of the discussion.

Who is to Blame

Manufacturers can be subject to strict liability and are thus charged with producing a product that is not defective and/or does not have an unreasonable risk of causing harm. Pharmaceutical (vaccine) manufacturers are subject to the same standards.

But there is one caveat regarding COVID vaccine manufacturers, vaccine manufactures are immune from legal liability - at least temporarily - under the PREP Act. More detailed information on the PREP Act is available from the Congressional Research Service.

Further, it is unlikely the government will accept legal liability for any injury or death resulting from the vaccines. Additionally, some states have extended immunity to include those who administer the vaccine (doctors, pharmacists, etc.).

If the injured person cannot go after the manufacturer, the government or the administrator, who is next? If the employer required the vaccinations – the answer is somewhat obvious, the employer. An employer that required the vaccine may be the only party that CAN be sued and potentially held liable for the near future.

Is Coverage Available

If, as a provable result of the vaccine, an employee dies or becomes seriously ill in the next few months or years (while the liability protection is in place), the employer that required the employee be vaccinated may find themselves on the defendant end of a lawsuit. Employers mandating vaccination may find themselves in court.

If an employer does end up in court, is there any insurance coverage available to cover the defense and/or any award granted? Three possible coverage options come to mind immediately:

• Workers' Compensation;
• Employers' Liability; and
• Employment Practices Liability.

How might these coverages respond to a vaccine-related death or injury of an employee if the employer requires the vaccine? Let's undertake a quick overview of each.

Workers' Compensation

To be compensable under workers' compensation the injury must arise out of and be in the course and scope of employment. Further, an occupational illness or disease that causes death or injury is compensable only if the illness, disease or resulting is peculiar to the industry or job. More detail on compensability in workers' compensation is available within the VU article, “Occupational Illness and Compensability."

Can death or severe injury/illness from an employer-required vaccine meet the requirements for compensability?  Although getting the vaccine was FOR work, it does not appear to arise out of and in the course and scope of THE work. Additionally, the illness or death is not peculiar TO THE WORK, the result is one to which members of the entire population (members of the general public) may be subject. (Specific details on each of these requirements for compensability is found in, “Occupational Illness and Compensability.")

Clearing the hurdles necessary to create a compensable injury under workers' compensation coverage may prove extremely difficult. Given the application of and requirements for compensability currently applied in workers' compensation, there does not appear to be protection provided by the workers' compensation policy.

Employers' Liability

Part Two of the workers' compensation policy is employers' liability. This is an often overlooked or even ignored gap filler between workers' compensation and general liability few agents understand. An Employers' Liability primer is available within the Big I's Virtual University research library.

Employer negligence and an ultimate finding of legal liability on the part of the employer are key requirements before employers' liability coverage is triggered. If the employer is not negligent in causing the injury or illness, employers' liability does not respond. To be considered negligent, the injured party must prove:

1. The employer owed a duty;
2. The employer breached the duty;
3. An injury occurred; and
4. The employer's breach of duty was the proximate cause of the injury.

(Note: A more detailed explanation of legal liability is available in the article, “How Does a Person Become Legally Liable.)

Proving negligence by requiring a vaccine may be difficult. The manufacturer has the duty to produce a safe vaccine, safety of the vaccine is not within the employer's control. It seems unlikely the employers' liability key trigger is tripped and thus it seems unlikely employers' liability coverage will respond. Additionally, there are other limitations with employers' liability coverage that may also preclude coverage.

Employment Practice Liability

Because there is no standard Employment Practices Liability (EPL) coverage form, anticipating how an EPL policy may respond to an employer requiring the vaccine could be more complicated, but then again, maybe not.

EPL is a type of “named peril" coverage. Although the term “named peril" is most commonly associated with and applicable to property coverage, it can be used to describe some liability coverages, especially management liability coverages. An EPL policy responds only to “Wrongful Acts," “Wrongful Employment Acts" or whatever the subject policy calls the acts covered by the policy. What qualifies as a covered act is specifically listed in the policy. Thus, it's a “named act" or named peril coverage.

If the act leading to the lawsuit is not named, the policy is not triggered and there is no coverage. Add to this a specific “Bodily Injury" exclusion found in most EPL policies and the EPL does not appear to provide any coverage if the employee develops an illness or dies from a required vaccine.

However, the EPL policy may be triggered if the employee is fired for refusing to take the vaccine. Further, most EPL policies provide coverage for hostile work environments, so even if the employee isn't fired, but the employer shames, withholds promotions or commits other such actions, the EPL may respond if the employee sues.

EPL may respond to a suit related to the taking or not taking of the vaccine, but it most likely will not respond to any injury or death that results from a required vaccine.

Insurance Realities

Whether an employer can require the vaccine and under what conditions are topics that must be addressed by employment attorneys. But if the decision is made to require vaccines for employment, the business owner must consider the possible financial consequences if an employee is sickened by or even dies as a result of the vaccine.

Considering the requirements and provisions of the most relevant insurance policies discussed in this article, the employer may have NO insurance protection if they are sued and ultimately held responsible for any illness or injury an employee suffers as a result of required vaccinations.  

Employers must make a business decision regarding vaccines. One factor that must be considered during the decision-making process is the potential financial consequences from the seeming lack of any insurance protection. The reality of this lack of insurance protection could prove very expensive for the employer.

Disclaimer: This information is to be construed as an opinion only based on a current understanding and application of the various policies. This should not be taken as legal advice or a definitive response by the various insurance carriers and policies. Laws vary and may be modified over time. 

Last updated: February 19, 2021

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