As of April 3, the United States had 245,646 confirmed cases, the most confirmed cases by region; Spain is second with 117,710 confirmed cases.

The explosion of cases in the U.S. has affected virtually all industries, but few have been directly impacted as much as those in the insurance industry. While the effects are more pronounced on the life and health side, property & casualty has also been affected — and the full extent may carry on for quite some time. Workers' compensation insurers, for example, may soon experience a torrent of claims related to the coronavirus, lawsuits if COVID-19-related claims are denied and much more.

An industry in crisis 

While COVID-19 isn't the first pandemic the workers' compensation marketplace has had to deal with, the way it has disrupted the economy and our collective way of life is vastly different compared to SARS, MERS and others. People across the country are staying indoors out of an abundance of caution; hospitals have reached their tipping points; nearly 10 million jobless claims have been filed in the last two weeks as the U.S. economy practically reaches a standstill, and many have died as a result of the coronavirus.

All of this spells trouble for a workers' compensation industry with no consistency across the states in how illnesses are treated from a legal perspective.

Generally speaking, it's difficult for people who have contracted a disease to demonstrate or prove that it occurred out of employment, says Joe Paduda, principal at Health Strategy Associates, a national consulting group exclusively for the health care industry. "Essentially, for someone who contracts an infection, they would have to prove they got that at work," adds Paduda.

The burden for the employee to "prove" they got it rising out of their employment is made even more difficult by the lack of available testing. Add in the fact that countless workers are now working from home — but can still be exposed to the virus in a number of ways — Paduda says it is entirely possible that the industry gets backlogged with controverted claims, especially as more people get infected.

For those working from home who contracted COVID-19 during that time period, Paduda says there is a more reasonable case an insurer could argue the person did not contract the virus arising out of the course of employment but rather in a home-type setting; so, therefore, the workers' compensation insurance company is technically not responsible. The argument is that they were working from home as they were told to do, but Paduda thinks there is a much more reasonable case the insurer could make that they did everything they could possibly do.

Despite this, Paduda says if workers' compensation insurers and employers don't step up and accept responsibility, they will be inundated with lawsuits and legal expenses.

"Not only is it the right thing to do for workers' comp insurers to step up and cover people who contracted this who are employed, [but] it would also be much more fiscally prudent to do that because the tort system is gonna drive them out of business if they don't," says Paduda.

Scenarios to keep an eye on

Much remains to be seen as to how COVID-19 will continue to impact workers' compensation and the larger P&C insurance industry. Certain scenarios, however, are already happening in real-time.

Rick Roberts, a former president of RIMS who has worked in the risk management field for over 30 years, says there could be an increase in ergonomic-related claims for employers. Because COVID-19 forced many employees to work from home, employers weren't able to do ergonomic evaluations for those employees; additionally, companies that do provide such evaluations or ergonomic products will likely be restricted from doing home assessments regardless. As a result, employers may see a spike in common ergonomic injuries such as carpal tunnel syndrome, tendinitis, lower back injuries and more.

Another scenario centers around essential workers, like those in public safety and health care, who are still at risk of getting hurt on the job.

"The question is how are they gonna get care when hospitals [and] health care facilities are avoiding any and all patients because of the COVID-19 risk, and they're all hands on deck working to prepare for a massive tsunami of people who are infected," says Paduda.

For the patients around the country who were already injured and out of work and seeing their doctor or physical therapist on a regular basis, the coronavirus has disrupted their treatment schedule; even if their health care providers are still open, many patients will likely be concerned about possibly contracting COVID-19. This scenario, however, has increased interest in telemedicine and telerehab from workers' comp insurers, employers and patients. This interest will likely be sustained beyond COVID-19′s lifespan as the last few months have shown that major disruptions to workers' comp, P&C insurance and the global economy are certainly possible in today's connected society.

The future is never guaranteed, but COVID-19 has created a level of uncertainty once unimaginable at the beginning of 2020. Insurance, specifically workers' compensation, will, without a doubt, be part of the solution. But until that solution arrives, the workers' compensation industry can expect the turbulent times to continue.

Related:

• The Families First Coronavirus Response Act: What employers should know
• Coronavirus implications for insurance
• COVID-19: Business overhead expense insurance considerations