Generals' Club webcast on May 13, 2020

1. Wednesday, May 13, 2020

2. 2
Webinar Format
 All Lines Muted
 Q&A
 Webinar Will Be Recorded
 Slides Will Be Shared With All Participants
 Provide Utah State Bar # for CLE

3. DEDICATED. DISTINGUISHED. DIVERSIFIED.
COVID-19: Returning to Work:
Operational Risks & Insurance
May 13, 2020

4. DEDICATED. DISTINGUISHED. DIVERSIFIED.
WHO WE ARE
Ourgoal istobethebestservice
providerin theindustry,notsimply
the bestinsurancebroker.Votedasa
UtahTopPlacetoWorkforsix years
andcounting,weprideourselveson
being differentthanthe competition.
AboutthisPresentation
Diversified Insurance Group is the sole owner and copyright holder ofthe document andthe
information contained herein. Further distribution orphotocopying is notpermitted without
the express written permission of Diversified Insurance Group.
Coverage analysis provided in this document is necessarily brief. The formal insurance
policies arethe final documents ofauthority. In the event of aloss, all terms, conditions,
exclusions, andother provisions ofthe actual policy will apply.

5. DEDICATED. DISTINGUISHED. DIVERSIFIED.
 Providescoverageforwork-relatedINJURYorILLNESS/OCCUPATIONALDISEASE
 Conditions= OccupationalandPeculiartotheworkorworkenvironment.
 Compensability/benefitsgovernedbyindividualstatestatutes.Standardtestis “Wastheemployeebenefitingthe
employerwhenexposedtotheillnessordisease?”
 RecentChangesandUpdates:
CAExecutiveOrderofMay6,2020
 Createsa rebuttablepresumptionin CAthatcontractionofCOVID-19isa work-relatedinjurywhencertain
requirementsaremet. Thismeansthataninjuredworkercan proveanindustrialinjuryina COVID-19claimwithout
havingtoshowthattheemploymentexposedtheworkertoauniqueriskofinfectionorthattheinfectionwaseven
acquiredatwork. Presumptionappliesifthefollowingconditionsare met:
1. TheemployeetestedpositivefororwasdiagnosedwithCOVID-19within14daysofperforminglaboror
servicesattheemployee’splaceofemploymentattheemployer’sdirection;
2. Thedaytheemployeeperformedlabororservicesattheemployee’splaceofemploymentattheemployer’s
directionwasonorafterMarch19,2020;
3. Thelocationwheretheemployeeperformedlabororserviceswasnottheemployee’shomeorresidence;and
4. ThediagnosiswasdonebyaphysicianwhoholdsaphysicianandsurgeonlicenseissuedbytheCalifornia
MedicalBoardandthatdiagnosisisconfirmedbyfurthertestingwithin30daysofthedateofthediagnosis.
Workers’CompensationUpdate

6. DEDICATED. DISTINGUISHED. DIVERSIFIED.
EmployeeSafetyConsiderations
SourcesofClaims
 Claimfrequencyisdecliningasfewerpeopleareworking – FORNOW
 Focushasbeenonessentialworkerswithdirectpatient/consumercontact. Longerterm,claimfrequencymay increasedue
to:
 COVIDrelatedillness
 Newlyhiredemployeesinunfamiliarpositions.
 WFH– in-home distractions/accidents,poorworkspace,confined spacewithfamily.
 HigherUnemploymentRate– experienceshowsthatworkers’compensationclaimsrisedramaticallyduringtimes
ofcrisis. Employeesfileclaimstodealwiththeirlossofincome,includingfraudulentclaims.
ClaimManagementDelays
• Adjusters,stateentities,medicalproviders,andinsurancecarriersare allrespondingslower.
• Claimsremainopen,treatmentisdelayed,and benefitswillcontinuelongerthanexpected.
Solutions
• Regularcommunicationwithinjuredemployees.
• Propertrainingofnewemployees– PPE, workspace,lifting,
• Reinforcesafetypolicesand procedures. Canbedonevirtually/electronically.

7. DEDICATED. DISTINGUISHED. DIVERSIFIED.
GeneralLiability:OperationalConcerns
Whatifacustomer,tenant,orbusinessinvitee…
 ClaimstohavecontractedCOVID-19asaresultofexposureona businesspremises?
 Claimstosuffermentalanguishasa resultofhavingvisitedapremisesthatwaslaterpublicizedasbeinglinkedtoCOVID-19
cases?
 Allegesanoccurrenceofassault,battery,libel, slander,orfalsearrestarisingfromabusinessowner’senforcementoperational
guidelinesrelatingtoCOVID-19?
Howdoesthepolicyrespondif…
 A tenant’semployeesuesalandlord,allegingCOVID-19exposurein acommon area?
 AnindependentcontractorallegesCOVID-19exposure?
Whataretheliabilityimplicationsof…
 “Presumptive”workplaceoriginsofCOVID-19withrespecttoWorkersCompensation?
 Contacttracingwhichsuggestsalink toabusinesspremises?

8. DEDICATED. DISTINGUISHED. DIVERSIFIED.
GeneralLiability:MaterialTermsandConditions
PolicyProvisions Wording andscope varies bypolicy,butbeaware:
CoverageTrigger Insureragreestopaysumstheinsuredbecomes legallyliabletopayasdamages
becauseof“bodilyinjury”or“propertydamage”towhichtheinsuranceapplies
BodilyInjury(BI)Definition • Mostbasic= BI, sickness,disease,orresultantdeath
• Broadened– adds resultantmentalanguish/distress
• Broadest– mentalanguish/distressisindependentBIcause
Exclusion – Fungi,Bacteria(&sometimes
Virus)
• Generallyappliestoanyactualorallegedexposureviapremises,productsor
operations
• Usuallyprovidesexceptionforproductsthatareintendedforhumanconsumption
Exclusion(s) – IntentionalActs;Assault&
Battery;MedMal
• Intendedtoexclude actswhichareintentionalorprofessional
• Cancomplicatesecurityandemergencyresponseefforts
Exclusions -BodilyInjurytoEmployees • Intendedtoexclude WorkCompinjuries/illnesses
• “ActionOver”claimscan stillbepickedup underemployer’sWorkComppolicy
whenaninjuredemployeesuesathirdpartywithAdditionalInsuredstatusunder
theemployer’sGeneralLiabilitypolicy.
BodilyInjurytoleasedlabor orcontractors Shouldbeaddressedin contract:WCCertificateofInsurance,WaiverofSubrogation(&
sometimesAlternateEmployer)

9. DEDICATED. DISTINGUISHED. DIVERSIFIED.
EmploymentPracticesLiability
 Policyis in placeto providefinancialprotectionforclaims alleging:
 WrongfulTermination
 Harassment
 Discrimination
 Retaliation
 OtherWorkplace Torts
CurrentObservations
 NationalOrigin Discrimination– many reportsin generalandin workplace. Asian-Americanshavebeentargetedfrequentlyand arealleging
discrimination,harassment,mistreatment,andbias.
 Masslayoffsandmassrehiringsmay alsotrigger Discriminationclaims. Layoffof an olderportionof theworkforce, rehiringof a younger
workforce?
 Age Discrimination – i.e. sendinghome allworkers over 60?
 HealthConditionDiscrimination– i.e. anyonewith immune deficiencies? Specificmedicalconditions? RaisesHIPAAviolationquestionsaswell.
 Wage & HourViolations– changesin workforce responsibilitiesmayleadto misclassificationof employees. Breaks,compensation forhours
worked, modificationin scheduledincreaserisk.
 HealthandSafety– Employersmust take all appropriatestepsto protect employeesandcustomersand“reasonablyaccommodate”them.
Failureto take appropriateactiontoaddresssafetyconcernswill eventuallybe investigatedby OSHA.
 Whencreatingpoliciesand proceduresrelatedtohiring/firing andmanaging healthriskin yourworkplace, you cannotsingle-outindividuals
basedonanyprotectedclass:
EmploymentPracticesLiability
 Sex/ GenderandSexualOrientation  Religion
 Race  NationalOrigin
 Color  Disability
 Age

10. DEDICATED. DISTINGUISHED. DIVERSIFIED.
Your Team at Diversified
Spence Hoole
President&CEO
Steve Handley
Executive VP
Deborah Walling
SeniorVP

11. Disclaimer–CoverageIntentandClaimsAnalysis
Please be advised that any and all information, comments, analysis,
and/or recommendations set forth above relative to the possible impact
of COVID-19 on potential insurance coverage or other policy
implications are intended solely for informational purposes and should
not be relied upon as legal advice. As an insurance broker, we have no
authority to make coverage decisions as that ability rests solely with the
issuing carrier. Therefore, all claims should be submitted to the carrier
for evaluation. The positions expressed herein are opinions only and
are not to be construed as any form of guarantee or warranty. Finally,
given the extremely dynamic and rapidly evolving COVID-19 situation,
comments above do not take into account any applicable pending or
future legislation introduced with the intent to override, alter or amend
current policy language.

12. THANK YOU
• Diversified Insurance Group | 136 South Temple, Suite 2300, Salt Lake City, Utah 84111 | 801.325.5000 | www.diversifiedinsurance.com

13. Employment Considerations
Sean A. Monson – Employment & Labor Chair

14. 14
Things are changing rapidly. We are working extremely hard to keep
up with all that is happening. This webinar is based on available
information as of May 13, 2020, but everyone must understand that
this webinar is not a substitute for legal advice. If there are questions
about the information contained in the presentation and how it applies
to your business, then you should contact your legal counsel. This
presentation is not intended and will not serve as a substitute for legal
counsel on these issues. Given the complexity and rapidly changing
landscape, you must consult with your legal counsel on these issues.
Legal Disclaimer

15. 15
Employment Law – Managing Risk
 Risk of lawsuits by EEs
 Personal injury – workers compensation
 Generally COVID 19 not covered by workers’ compensation
 Seeing a slew of lawsuits across the country by EEs and
customers based on COVID 19 “negligence”

16. 16
Utah Liability Statute –
Not a Get Out of Jail Free Card
 Limit risks of liability in lawsuits by
customers/employees/tenants related to COVID 19 illness
 General rule – not liable . . . BUT
 Exceptions
o Willful misconduct
o Intentional infliction of harm
o Reckless infliction of harm
 Possible federal statute

17. 17
How to Manage COVID Risks – Three Ps
Plan
o People
• Who; when; staggering shifts
o Places
• Distancing
o Policies
• Cleaning; training; discipline; huddles

18. 18
How to Manage COVID 19 Risks – Guidance
and Document, Document, Document!
 Plan needs to be rooted in federal, state, and local guidance
o CDC, OSHA, State of Utah, Counties (e.g. Salt Lake County)
 Document, document, document – if it is not in a
contemporaneous document, it did not happen
o Explaining
o Training
o Discipline

19. PPP Loan Program
Matthew D. Cook – Corporate Transactions & Securities Chair

20. 20
Current Issues Under PPP Loan Program:
 Amnesty ends May 14, 2020
 Good Faith Certification Standard
o [C]urrent economic uncertainty makes this loan request necessary
to support the ongoing operations of the Applicant.
o Available Liquidity (What Does this Mean?)

21. 21
Current Issues Under PPP Loan Program:
 Dilution of Benefits of PPP Loan Program (IRS Notice 2020-32)
o Expenses Paid with Forgivable Fund Don’t Qualify for Expense
Deduction
• Legislation has been proposed to remedy
 PPP Loan Landscape – Building an Airplane Mid-Flight
o DV Diamond Club of Flint, LLC
o Camelot Banquet Rooms, Inc.
o Other litigation and proposed legislation

22. 22
What Can PPP Borrowers Do Now?
 Document Diligence and Decision Making Process at Time
of Need Certification
o Things You may have considered:
• Cost/Benefit of Workforce
Reduction
• Need for Employees
• Available Liquidity
• Cash Flow Projections
• Industry Impact
• Similarly Situated Organizations
• AR/AP Projections
• Supply Chain Disruptions
• Client/Customer Impact
• Business Closures
• Historical Access and Use of
Equity/Debt Capital
• Economic Trends and Forecasts
• Cost Saving Measures

23. 23
Documents to Maintain
 Communications (email text, phone log etc.), both internal
and external.
 Board meeting minutes, management discussions and
contemporaneous notes.
 Excel spreadsheets and associated financial projections
and statements.
 Records of phone calls or other correspondence.
 Copies of diligence (studies, data, news articles or other
materials or broadcasts that were influencing decision
making.)

24. Q & A

25. 25
Presenter Contact Information
Sean A. Monson
smonson@parsonsbehle.com
Matthew D. Cook
mcook@parsonsbehle.com
Steve Handley
shandley@diversifiedinsurance.com
Deborah Walling
dwalling@diversifiedinsurance.com

26. Thank You