There have already been almost 1,000 lawsuits filed in federal courts as a result of the coronavirus pandemic. While most of these relate to prison conditions, the next largest groups of lawsuits involve insurance coverage and contract disputes between parties. Insureds are suing to seek coverage for their shutdown-related losses, while insurance companies are mounting strong defenses to foil those attempts. In addition, employees are suing their employers over unpaid wages by working seemingly around-the-clock at home or over unsafe working conditions. Other companies – facing defaults and other breaches by parties on the other side of contracts – are suing to force performance or recover damages from the breaching party. These are just some examples of the cases we are seeing develop. We expect to see years of pandemic-related lawsuits and insolvencies in all sectors of the economy.

This early influx of lawsuits is just a tip of the iceberg. As history has shown, lawsuits often spike after calamitous events as businesses try to recoup their losses through insurance or against other parties. If you are not yet embroiled in litigation, you will likely see potential disputes or legal challenges brewing in your workplace. There are several practical tips you should consider as you navigate the legal issues due to the pandemic.

1. Insurance – Be absolutely sure whether you have insurance for any of your losses and expenses. While insurance companies have done a good job with writing away coverage for viruses and bacteria, there may be other arguments you could make under your policy for coverage. If you believe you may have coverage or are not sure, talk to your broker and consider sending a claim to your insurance company for coverage. Although it might be debatable whether your claims would be covered, if you wait too long and prejudice your insurance company’s ability to investigate or mitigate your damages, you will most certainly lose the right to any coverage.

2. Financial Records – Talk to your accountant and see if it makes sense to create separate entries on your ledger or in your accounting system to capture your specific COVID-19 related losses, such as increases for personal protective equipment, cleaning supplies, office modifications, equipment, hand sanitizer, thermometers, etc. This would make any insurance claim easier to prove and it’s possible there could be future state or federal stimulus loans or grants for such expenses. It will be much easier to run a report by a press of the button for your COVID-19 related expenses than to go back in time and try and recreate them as you’re scrambling to get a stimulus application filed.

3. Employees – Be transparent with your employees. Understand that they are likely frightened to come into work. Although it is critical to screen them for symptoms and other risk factors, make sure you know the bounds of the law in doing so. The current legal environment of discrimination laws, workplace safety, and wage/hour regulations can be complex under the best of circumstances. But, during the pandemic, these rules and interpretations appear to be changing or becoming more refined on a weekly basis. It is important for you to regularly check your state’s labor department, the U.S. Department of Labor, and Equal Employment Opportunity Commission (EEOC) websites for updated guidance during the pandemic.

4. Business Documents – If you do not have a robust and functioning document retention system, now is the time to implement one. With the prospect of litigation either by or against you as a result of the pandemic, it is critical that you keep all customer/client communications, vendor documents, emails, and other relevant documents in case a dispute arises. Too many companies lose leverage or a lawsuit because they cannot find key documents, emails, or text messages that would have swung the legal arguments in their direction.

5. Cybersecurity – You probably did a good job allowing your employees to work remotely, as you had no real choice in the matter. On the other hand, you probably did not appreciate the risks associated with so much of your IT environment existing on people’s kitchen counters and basements. Cybersecurity threats and enterprise risks do not get paused or go on hold during a pandemic. Actually, cybercriminals increased their activity over the last 60 days, hoping to take advantage of workers whose guards were down and whose nerves were frayed. Remember that the weakest links in your IT environment are your employees. Once they settle back into the workplace, you should consider a cybersecurity refresh such as global password changes, device inventory, device virus/malware scams, etc.

This all sounds very daunting as you are trying to get your machines back up and running and customers in the door. Running a business will not return to usual for quite some time, if ever. However, it is important to remember that if you end up involved in litigation, those parties who have been diligent and prepared will fare better than those who put good preparations on the back burner.

PLDO’s team of business, employment, estate and tax attorneys are monitoring and providing updates to legal issues arising from the COVID-19 crisis. If you have questions and need assistance for your organization, please contact your PLDO attorney or Partner Brian J. Lamoureux, business and employment lawyer and litigator at 401-824-5155 or email bjl@pldolaw.com and Managing Principal Gary R. Pannone at 401-824-5100 or email gpannone@pldolaw.com. For more information and resource materials about the COVID-19 pandemic, visit PLDO COVID-19 Resources and sign up to receive our e-newsletters, alerts and advisories here.

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