Blog

As we move deeper into the 2000s, “smart” devices are only getting smarter. From phones to homes, vehicles, and fitness devices, we are surrounded by a veritable web of constantly engaged devices. While a decade ago, these devices simply provided us with new levels of convenience, now, they can do even more: they can connect and “talk” with each other, unlocking entirely new levels of efficiency. Consumers and businesses alike rely on this connectivity for convenience, accessibility, and automation across platforms.

Enter: the “Internet of Things (IoT),” a virtual web of the devices that connect and communicate with each other via the Internet. From data storage and retrieval methods to remote workspace management and corporate process improvement, the IoT increases efficiency in all aspects of life. 

Understandably, this can all seem extremely vague. What, exactly, is the IoT? Who (other than maybe Al Gore) invented it? Is it safe? And who, if anyone, regulates it? In the paragraphs that follow, we provide a basic overview of the IoT, from what it does, to who regulates it and the legal issues it can generate.

What, Exactly, Is the IoT?

While it seems like a nebulous concept, the IoT is nothing other than a network of devices that are equipped to exchange data. Once upon a time, the IoT was limited to computers, fax machines, and eventually cell phones. But now, kitchen appliances, cars, light fixtures, thermostats, cameras, and televisions can communicate through the Internet.

Current estimates suggest that the IoT is made up of more than seven billion devices. However, with new devices introduced to the market constantly, the IoT is expected to grow by more than twenty billion in just five years. Several companies, like Amazon and Google, have developed hubs for consumers to manage and control all their connected devices in one place. 

For consumers, cell phones are the most common access point to the IoT. Currently, the IoT is the avenue by which smartphones connect and provide remote access to the Internet, household appliances, personal computers, vehicles, and more. 

Other examples of how consumers interact with the IoT are:

• Vehicle-to-vehicle communication 
• Municipal grids designed to increase energy efficiency and reduce waste
• Insurance companies seeking to record location and operation data in real-time
• Smart home connectivity
• The use of health and fitness devices
• Cloud storage methods like the G-suite and Dropbox

Legal Concerns 

The IoT presents legal risks, however. With this level of connectivity, privacy, data security, and intellectual property concerns are inevitable. Such an extensive and ever-expanding web of devices will likely generate unforeseen legal issues in the coming years and decades. Currently, however, some of the most common legal issues are:

Security Breaches

The IoT allows data to be shared with minimal human interaction (a convenience factor, especially in the corporate context). However, because these devices are almost constantly switched “on,” there are risks associated with recording sensitive personal information, security breaches, data scraping, and hacking. 

Issues for Manufacturers

The creators of devices that work within the IoT can face liability if the devices lack adequate safety measures, most especially, data security capabilities. 

Intellectual Property (IP) Disputes

When data is freely shared and exchanged, issues of ownership can become murky. In many cases, companies may struggle to claim ownership over information that is shared across devices and platforms.  

Antitrust Violations

Should information be shared between competitors to create market power or other illegal market conduct, an aggrieved party can raise an antitrust violation claim.

Who Regulates the IoT?

The issue of regulation can be murky. Generally, the IoT sees minimal government regulation, as the FTC has declined to issue overarching guidance on its use. Some international laws, like the European General Data Protection Regulation (GDPR) and the ePrivacy regulation, impact the IoT by speaking to data privacy and the protection of personal information. Additionally, the FCC does regulate the Internet and issues recommendations for companies that provide home, wearable, or other personal devices. However, the agency asks device manufacturers to incorporate security features into their designs. 

However, even the best security is not risk-free. Privacy and cybersecurity concerns, particularly data breaches and intellectual property (IP) issues, continue to plague the IoT. Rather than relying on built-in safety tools and user settings, businesses and consumers must incorporate additional safety measures to ensure their information is secure and their devices are safe. 

The Significance of the IoT

The IoT is not just making consumer lives easier by connecting every device they need with remote access in one place. Industries from healthcare to manufacturing rely on the IoT for improving efficiency for better productivity. And while there are risks inherent in having so much technology connected as it is through the IoT, the continued advancements, economic benefits, and reduced need for human involvement provided by the IoT connections are saving companies money, increasing efficiency, and improving quality of life.

Nonetheless, the IoT is still new terrain and as such, there are still numerous unresolved issues regarding its use and regulation. In all cases, consumers and businesses alike should take caution in choosing to share or disseminate sensitive information.

At Wilson Ratledge, we assist business founders in taking steps that keep their businesses – and their personal assets – safe. In our digital age, this inevitably includes the Internet of Things. We help our clients in setting up appropriate legal protections for the IP they develop and help structure their businesses to address potential pitfalls down the road. For assistance or to learn more, contact one of our experienced North Carolina business attorneys today at 919-980-4082 or via our contact form below. 

As a business owner, one of the key considerations in selecting a specific business entity is how much liability you are willing to take on. Corporations are viewed as individuals under liability laws, which generally means that you, the business owner, are not personally liable for the debts or legal obligations of your business. 

Nonetheless, exceptions apply. In some situations, a business owner can be held personally liable for business debts or other obligations that would ordinarily fall within the business’ responsibilities. Through a process known in legalese as “piercing the corporate veil,” a creditor or individual may sue the business owner personally for the transgressions of the business. This would expose your personal assets, like your home, your vehicle, and your bank accounts to a civil judgment. 

So, how is the corporate veil pierced and what can you do to protect yourself and your business?  Here, we discuss the basics you need to know about the liability shield known as the corporate veil and how to strengthen it to protect yourself and your assets from personal liability. 

What is the “corporate veil?”

The “corporate veil” is a term used to refer to the liability shield established when a corporate entity is created. By operating as a corporation rather than a sole proprietorship, the business owner is generally shielded from personal liability for actions or debts of the business. Should a creditor or individual harmed by the business file suit for the debt or injury, only the business and business assets would be at risk. The business owner and his or her personal assets are protected from liability. 

In other words, the corporate veil separates the business and the business owner, ensuring both are treated as separate legal entities.      

How is the corporate veil pierced?

If the court determines there is an insufficient separation between the business and business owner for the two entities to be treated independently, a creditor or individual can file a legal action to “pierce” the corporate veil, that is, sue the business owner personally for one of the business’ transgressions. Upon piercing the corporate veil, the legal protections previously afforded to the business owner through the creation of the entity disappears, exposing his or her personal property to a civil judgment.

To pierce the corporate veil, the creditor or injured party must prove that the business was not functioning as a separate entity and that the lines between the business and its owner were blurred. This is often called the “alter ego” theory; that is, the business was operating as an alter ego of the business owner himself. In these cases, creditors can attempt to hold the business owner responsible for the debt or injury. In North Carolina, the creditor or injured party seeking to hold the business owner liable by piercing the corporate veil must prove that the business owner had so much control over the business that the business did not have a “separate mind, will, or existence of its own.”

As in most states, North Carolina law generally does not favor the practice of piercing the corporate veil and trumping the liability protection afforded to business owners. Therefore, the individual seeking to hold the business owner personally liable must allege and prove serious misconduct to overcome the liability protection. 

Courts examine several factors in discerning whether a company truly has established an independent existence from its owners. Some of these factors include:

• Whether the company was adequately capitalized;
• Whether the company’s directors, shareholders, officers, members, or managers compiled with corporate formalities in running the business;
• Whether the company was solvent; 
• Whether the company was fragmented into multiple “shell” entities;
• Whether the individual owner at issue siphoned funds from the company to pay his or her personal expenses or debts; and
• Whether the company maintained proper corporate records.

Can I avoid personal liability?

The simplest way to maintain the protection of your liability shield is to make sure that your business operates in a fair, honest, and accurate manner following applicable rules and complying with business standards. 

Your attorney can advise you on how to do so. However, generally, business owners seeking to maintain substantial liability protection tend to do the following:

• They do not commingle finances. They keep business accounts and personal accounts separate. They do not use corporate accounts or other business funds to pay personal expenses. 
• They follow the rules. Corporations must create and comply with bylaws, pay corporate taxes, and satisfy meeting requirements. There are strict formalities that corporations must follow, and LLCs are advised to comply with the same requirements. 
• They maintain proper records. Business decisions and meetings should be documented, and the records should be kept for at least seven years. Businesses that maintain a strong liability shield ensure minutes are recorded for significant meetings such as board meetings and shareholder meetings. All their records are accurate, consistent, and stored in a secure location.
• The adequately fund the business. You need money to start a business. Whether you use your own money, have investors, or obtain a business loan, you must have adequate funds to purchase the equipment and inventory you need to open the business and maintain operations. 
• They properly convey their business status. Whether you are a corporation or LLC, make sure that your business status is apparent, and you do not present yourself as a sole proprietor. Invoices, contracts, business cards, and other business-related documents should address the business as an entity separate and apart from you and your assets.

An experienced business attorney can assist you with structuring your business and managing business transactions to protect you from personal liability. Whether you need assistance getting your business started or have questions about your liability based on current practices, our team has the knowledge and advice you need to operate a successful business with a strong veil to shield you from personal liability.

Whether you are young and in perfect health or aging with health concerns, estate planning is necessary. An estate plan allows you to decide who will manage your estate after you die or if you become incapacitated. Through an estate plan, you not only name the person responsible for making sure your wishes are honored, but an effective estate plan also details your preferences for everything from healthcare to finances and property distribution.

Estate planning can be complex and involves a lot of difficult decisions, so it is important to recruit an appropriate team of professionals to help you navigate the best options for your circumstances. An estate planning attorney and financial advisor or accountant are vital members of your estate planning team.  

How important is an estate plan? What components do you need? We address these and other frequently asked estate planning questions in the paragraphs that follow.

Do I need a will? What happens if I die without one?

Yes! If you care how your property is distributed, who will care for your minor children when you are unable to do so yourself, or if you just want to make sure your loved ones have the financial means to get by after you are gone, you need a will. A will allows you to transfer assets to beneficiaries, select guardians for minor children, and choose an executor to manage your estate upon your death. 

If you do not have a will, your assets will pass through the state-sanctioned intestacy scheme. This means state law will determine how your estate is distributed. Unfortunately, this means everything from your personal property to your children goes to whomever the state law determines is appropriate regardless of what you may desire. 

What are the benefits of proper estate planning?

Having an estate plan does more than just offer peace of mind that your assets will be distributed per your wishes. The taxes associated with settling an estate can be costly. An effective estate plan can reduce or eliminate estate taxes. Additionally, your estate plan can be used to protect your property now, upon your death, and long after you are gone in the event of post-mortem litigation against your estate or divorce.

A clear estate plan provides the guidance your loved ones need when you become incapacitated or die. Difficult decisions about life-sustaining measures or arguments about who should get a beloved family heirloom only add stress to an already emotional time. Proper estate planning removes the burden of settling your estate from your family.

What are the elements of an effective estate plan? 

Every estate plan looks different and varies in complexity based on the needs and assets of the individual. However, while there are many components of an effective estate plan, four main elements are found in all effective estate plans: the will, living will or advance directive, a power of attorney, and a trust.

• Your will protects your estate from the complications of probate or intestate distributions. 
• A living will or advance directive is also necessary because it allows you to make decisions about your medical care in the event you become incapacitated, terminally ill, or otherwise unable to communicate your desires. Your feelings about being placed on life support or receiving other life-sustaining medical interventions will not matter if you do not have an advance directive. Medical providers will make these decisions for you or your family will face the difficult burden of deciding what to do. 
• A power of attorney allows you to name the individual responsible for making decisions when you are unable to do so for yourself. 
• A trust protects the specific distribution of your assets, such as ensuring your child receives the benefits of your assets regularly throughout their life, all at once upon a certain life event like marriage, or other stipulations. Whether or not you need a trust depends on the size of your estate and/or the necessity for oversight in ensuring your heirs properly manage your assets upon your death such as minor children or elderly parents in need of long-term care. However, everyone needs a living will or advance directive and a power of attorney, regardless of the size of your estate or family situation.

How often do I need to update my will?

Generally, you should review your will and all components of your estate plan at least every three years to five years. However, any significant life event should also trigger a review of your estate plan. This includes events like marriage, divorce, a new child, or even a change in jobs or income. Failure to review and update your estate plan timely can lead to problems when intended heirs being unavailable, or due to other administrative flaws.

When is the best time to plan my estate?

Now. There is no such thing as creating an estate plan too early, but if you are waiting for some life event to do so, like a specific birth date or terminal diagnosis, that event could come after it is too late. You must be of sound mind to create a valid estate plan. 

How can an estate planning attorney help me?

The laws regarding estate planning are intricate and complicated, full of technicalities and nuances that make drafting an effective estate plan tricky. Can you write your own will and it be valid? Sure. However, a simple typographical error or missing signature could not only nullify the document’s validity, it could change the entire meaning of your document to directly contradict your intentions. 

An experienced attorney is not only skilled at applying the law to make sure your documents hold up in court should someone decide to challenge them, but can also make suggestions to address matters you might not otherwise think to plan for. 

At Wilson Ratledge, we assist our clients in setting up estate plans that give them the peace of mind in knowing that their assets and loved ones will be adequately protected. Contact one of our experienced North Carolina estate planning attorneys today at 919-787-7711 or via our contact form below.

Since it became effective on May 25, 2018, the General Data Protection Regulation, or GDPR, has bound U.S. companies in matters of privacy and data security. Specifically, the regulation requires companies to take certain measures to protect personal data when clients or customers hail from the European Union. You might be wondering why a North Carolina company needs to know anything about an EU law. It turns out that the regulation applies not just to EU companies, but also to those outside of the EU. 

Here, we provide a brief overview of the GDPR, discuss how North Carolina companies can collect consumer data while still complying with the regulation, and note the potential consequences of violating the regulation. Finally, we will briefly discuss how an attorney specializing in data privacy can help your company comply with the GDPR. 

What Is the GDPR?

The GDPR is a regulation that controls the collection and use of personal data of EU users. It was enacted to prevent the misuse of personal data and give EU citizens and those living in the EU control over how their data is used. 

The GDPR defines personal data as information belonging to an identifiable person (i.e., not anonymous) that a company collects from EU users. Personal data includes (but is not limited to) information such as:

• Name
• Age
• Email address
• Physical address 
• Identification number
• Telephone number 
• Financial information
• IP address 
• Gender, race, political, or religious information 

Does My North Carolina Company Have to Comply With the GDPR?

The short answer is that, yes, most North Carolina businesses have to comply with the GDPR. While the GDPR is a European regulation, it applies to any company that offers goods or services to EU users or that collects data from EU users. 

It is important to note that “EU users” are not just EU citizens. The definition includes all individuals who are physically located in the EU and any EU citizens, no matter their location. This means that if your company sells physical products online, sells services online, or otherwise collects information from customers on the web, it will need to comply with the GDPR, as it is likely that EU users will visit the company website and enter their information. 

No matter the type of company or the size, if you gather any personal data at all, the GDPR applies. This means that if you collect consumer information on your website via a lead magnet or opt-in (where you collect a user’s name and email address), for example, you must comply with the GDPR. 

How to Comply 

There are a few steps companies that collect personal data can take to stay compliant with the GDPR. 

While each company is different and should certainly consult an attorney to ensure that its specific practices are GDPR-compliant, at a minimum, companies should consider the following measures:

1. Obtain users’ consent: If you plan to collect and keep personal data, you must specifically request the data from the user. Translate this request into clear, concise language so that website visitors understand their data is being collected. 

• Provide users access to their own personal data: You must provide a user access to your company’s records of their personal data that you collected and stored. This must be free of charge and include an explanation of how the company uses the data. 

• Delete personal information when requested: If a user requests that his or her personal data be deleted, you must do so. Users can ask this of a company at any time, and you are obligated to respect those wishes.

• Provide notice of a data breach: If a data breach occurs, you have 72 hours to report the breach to a reporting agency and to any customers who were potentially impacted.

Steps to Take to Keep Consumer Data Safe

While the GDPR may at first sound overwhelming, there are practical steps companies can take to keep consumer data safe. 

If your company is large and collects substantial amounts of personal data, consider hiring a person to fill this role. It would be this person’s responsibility to learn the requirements of data collection and use so that any user requests (such as deleting personal information) and breaches can be dealt with by this person. Clearly inform users on your website who is responsible for GDPR compliance and direct them to this person for any requests, questions, or concerns. 

Second, spend time developing an online presence that takes into account the requirements of the GDPR. The more time you spend up-front, the fewer issues you will have in the future. This will likely include placing clear language on your website, developing easily accessible policies, and providing users with information on how they can contact the company and inquire about their data use. 

Consequences of Non-Compliance

The potential penalties for non-compliance with the GDPR are staggering. Depending on the nature of the non-compliance (such as how long the violation lasted, what types of personal data was involved, and what steps were taken to fix the issue), businesses can face fines of the greater of $20 million or four percent of the company’s annual revenue. 

While it is unclear how EU regulators would collect fines from a North Carolina business with no ties to the EU (other than EU customers or website visitors), business owners should be aware of these potential monetary consequences and do all they can to comply with the GDPR.

How a Data Privacy Attorney Can Help Your Company 

An attorney specializing in data privacy issues can assist your company with developing privacy policies, reviewing your online security processes, and more, to ensure you comply with the GDPR. 

Whether you are a one-person startup or a fast-growing North Carolina business, contact our data privacy attorneys today to learn how we can assist you. At Wilson Ratledge, our attorneys regularly advise our clients on issues of data privacy and keeping consumer information secure. For questions or assistance, reach out to us by calling 919-787-7711 or via our contact form below. 

Seemingly out of nowhere, the COVID-19 pandemic swept across the world and sent most of us to our homes to work, full-time, where many of us still find ourselves today. If you are a startup founder in need of investors, you might be wondering how you will find funding if you can no longer meet with potential investors face-to-face. Luckily, as fast as the world changed and shifted to working from home, the world has adapted, and remote pitching has become commonplace among startups and investors.

While many of the tactics you used for in-person pitches remain the same for remote pitches, there are some tips that you should know to make the most out of your remote pitches. Read on for our top tips that will give you the best chance of success when pitching a potential investor.

Prepare Well in Advance

Prepare for the call well in advance by educating yourself on the potential investors.

First, you should know exactly to whom you are pitching. Are there specific types of startups in which they invest? What are their specific industries of focus? How much capital do they generally invest? Consider factors that will give you insight into whether you might be a good fit for them and to show you where you might have a weakness that you will need to overcome to receive their backing.

Second, once you have prepared your presentation materials, share the deck with the investors ahead of time. Ask them to take a look and let you know if there are any specific topics for which they would like more information or how they would prefer you focus the presentation. If you involve them in advance and tailor the presentation to what they are looking for, they will be more likely to be engaged during your pitch.

Lastly, set a clear agenda for the pitch. This way, you will have enough time to cover everything you need to cover during the remote meeting.

Prepare Questions and Ask for Questions

During your pitch, you should ask questions to make sure the potential investors are a good fit for your company. While you might think an influx of cash to your company is a good thing, you want to be sure that the investor is aligned with your vision for the company, too. Prepare a few questions to ask during the remote pitch to determine whether the investor will truly add value to your company – beyond the initial influx of capital.

Likewise, investors will probably have many questions for you, the founder. In addition to asking for questions at the end of the presentation, if you share your deck with the investors well in advance, you can encourage them to send you questions ahead of time so you can either cover those questions during the presentation or be prepared to answer them at the end.

Check (and Double Check) Your Technology and Practice Your Pitch

The last thing you want during a remote pitch is for something to go wrong with your technology. While you can never be 100% certain that your technology will not fail you during a remote call, by preparing well and checking all of your technology ahead of time, you will cut the chances of error down considerably.

Some things to look out for include:

• Ask to use your own conferencing platform, as opposed to the investor’s, so that you know you are comfortable with it.
• Do a few test pitches to make sure you can share your screen, click through your deck, and use all of the functions correctly.
• Check your wifi’s speed and bandwidth to make sure it can support a video call.
• Set up your desk to minimize distractions and make sure your space looks professional and neat.
• Position your camera and computer so that your shoulders-up are showing to simulate an in-person meeting.

Know Your Story and Articulate It Well in Your Slides

The story you tell about your company’s mission, as outlined in your pitch deck, will be the most important part of your presentation. If you cannot capture the investor’s attention with your story, you are unlikely to land the funding.

Once you sketch the story you want to convey, take the time to set it out in a compelling way in your pitch deck. You want each slide to elicit a certain response from the audience (your potential investor), so make sure each slide does just that. This is even more important in remote settings, as it is harder to capture an audience through a screen. Do not be afraid to make your visuals catchy and eye-popping, so long as they tell the story you want to tell. You want to be someone that investors remember, not just another face they saw across the screen.

Post-Call Best Practices

End your remote pitch with a clear call to action so that everyone understands what the next steps will be. Do not be shy to ask for what you want – if it is funding you are pitching the investors about, ask for it. They may offer you just that, or they may need more time to make a decision.

After the call, follow-up with a short email summarizing the key points and takeaways from the pitch. If there were any questions you were not able to fully answer during the call, answer those. Otherwise, thank the investors for their time and let them know you look forward to continuing the dialogue and that you are available to answer any additional questions they might have.

Remote Pitching May Be Different, But it Does Not Have to Be Difficult.

There is no one right way to do a remote pitch, but, hopefully, with these tips you will be better equipped to face the unique challenges startup founders face when facing potential investors across a screen instead of across a room.

At Wilson Ratledge, our attorneys regularly assist our clients in preparing pitches to investors and securing their initial rounds of funding. For questions, or to set up a consultation with one of our experienced North Carolina business planning attorneys, call 919-787-7711 or reach out via our contact form below.

Workers’ compensation claims have a twofold purpose: to compensate employees who suffer work-related injuries and to protect employers from being sued by their injured employees. For this reason, North Carolina requires most businesses with three or more employees to obtain workers’ compensation insurance. Here, we discuss the general worker’s compensation requirements for North Carolina employers and how COVID-19 might impact employee claims.

General Requirements for Employers

The North Carolina Workers’ Compensation Act (North Carolina General Statutes §97-94) generally requires all businesses in the state (whether they operate as corporations, sole proprietorships, LLCs, or partnerships) with three or more employees to obtain worker’s compensation insurance. Certain exemptions apply, including for businesses that employ:

• “casual” employees (those whose work is casual and not part of the regular trade or business);
• domestic servants working in a household;
• farm laborers when there are fewer than ten full-time, non-seasonal workers;
• employees of certain railroads; and
• North Carolina federal government employees.

Who Does NOT Count as an “Employee” for Workers’ Compensation Purposes?

Whether a business employs three or more employees is not as straightforward as it might sound. The following groups of individuals generally do not need to be covered by workers’ compensation insurance:

• Business owners, such as partners in a partnership, do not necessarily count as employees.
• Corporate officers may elect to be excluded from coverage (however, they will still be counted as employees when determining whether a business has three or more employees, even if they opt-out of coverage).
• Finally, with some exceptions, independent contractors generally do not qualify as employees.

How Much Does Workers’ Compensation Coverage Cost Employers?

The cost of workers’ compensation insurance coverage will vary depending on the number of employees a business employs and the type of jobs its employees perform. The North Carolina Rate Bureau is a non-profit organization that sets “class codes” and “base premium rates” for workers’ compensation, which will determine the total cost of workers’ compensation for a business.

These figures vary and reflect how dangerous a job is compared to another type of job (with high-risk jobs carrying higher base rates than lower-risk jobs). Depending on an employee’s class code and base premium rate, the North Carolina Rate Bureau will set a rate for its workers’ compensation premiums, which businesses must follow.

North Carolina workers’ compensation insurers usually offer discounts to employers. These discounts will vary based on the insurer but can include discounts for a drug-free workplace; for businesses that are part of a professional, trade or industry group; and for businesses that implement certain safety or fall prevention programs. 

COVID-19 and Workers’ Compensation in North Carolina

For the foreseeable future, COVID-19 appears to be here to stay, and businesses across the State continue to be affected by it. While most businesses will undoubtedly be impacted by COVID-19 in one way or another, many business owners likely wonder how it will affect their workers’ compensation claims. Most notably: Will employees be able to file workers’ compensation claims for having contracted COVID-19?

Unfortunately, the short answer is that we simply do not know. It is unclear whether these claims will be compensable under North Carolina law. While it appears more likely that they will be denied, to understand why this issue is so complex, it helps to review the laws surrounding workers’ compensation claims.

Coverage for Workers’ Compensation Injuries

Coverage for workers’ compensation injuries is divided as follows:

• Injuries that occurred because of an accident or specific trauma (e.g., a slip-and-fall at work); and
• Injuries caused by an “occupational disease.”

Potential COVID-19 claims would likely have to be filed as “occupational disease” claims. The North Carolina statutes define an occupational disease as either one of the specific diseases enumerated in the Act (which does not include COVID-19), or any disease acquired while working at a job that placed the person more at risk for getting the disease than the general public.

Thus, if the general public is equally exposed to the disease outside of the place of employment, the disease is not considered an occupational disease and therefore would not be covered by workers’ compensation.

Establishing Eligibility for a COVID-19 Workers’ Compensation Claim

To be eligible for benefits, an employee must show that he or she contracted COVID-19 from exposure on the job and, because of the job, he or she was at a greater risk than the general public. It might be that some frontline workers, such as healthcare workers, would be able to show that they were at higher risk of exposure to the virus than the general public. Likewise, it is possible that others, such as grocery store clerks, could show the same.

What becomes more challenging to prove, however, is causation, that is, a link between the employee’s job and the resulting COVID-19 infection. Even if it were likely that the employee contracted the virus while on the job, (such as while working at a hospital or treating patients infected with COVID), it would be very hard to prove this, as the disease could have just as easily been contracted outside of work. In other words, proving causation is extremely difficult, if not virtually impossible.

Currently, unless legislation is passed that defines COVID-19 as an occupational disease, it appears likely that an employer will be in the position to deny such claims in North Carolina. However, this is an unfamiliar terrain, and the coming months are likely to bring more clarity.

Workers’ Compensation Claims During Uncertain Times

While the costs associated with a workers’ compensation policy will vary depending on the size and nature of your business, owners of small, medium-sized, or large businesses should be aware of their obligations. At this time, it remains unclear whether COVID-19 claims will be covered under workers’ compensation insurance, but business owners should make sure they are fully in compliance with the laws regardless of what changes may be on the horizon.