(CN) – The insurance industry is bracing for a tidal wave of claims related to the Covid-19 outbreak, and experts say the new viral disease puts claimants — and the industry — in uncharted waters.

“The pandemic has presented many challenges for litigation strategies,” said Peter Woo of the Goldberg Segalla law firm, adding workers compensation, unemployment and injury claims have “wreaked havoc for employers and we’re just at the tip of the iceberg.”

As employers around the country furlough employees and reduce hours, this “tends to trigger highly emotional responses” from employees, and businesses need to stay on top of policies and how they communicate those to their employees, Woo said. “This is having an unprecedented effect on U.S. businesses, large and small,” he said.

The Families First Coronavirus Response Act, or FFCRA, which President Donald Trump signed into law March 19, outlines the rights of businesses and employees. “Companies have to stay on top of FFCRA … so employees have guidance,” Woo said.

Business-interruption policies are a major part of commercial insurance, but it may be these policies that expose the insurance industry to increased risk during the Covid-19 pandemic, according to the National Association of Insurance Commissioners. Such policies were generally not designed to provide coverage against communicable diseases such as Covid-19, the association said.

“Insurance works well and remains affordable when a relatively small number of claims are spread across a broader group,” the association said in a statement. “Therefore, it is not typically well-suited for a global pandemic where virtually every policyholder suffers significant losses at the same time for an extended period. If insurance companies are required to cover such claims, such an action would create substantial solvency risks for the sector, significantly undermine the ability of insurers to pay other types of claims, and potentially exacerbate the negative financial and economic impacts the country is experiencing.”

In addition to business-interruption issues, businesses should prepare for employee-related claims, attorneys at Goldberg Segalla said Friday in a web conference.

Woo said the insurance industry is bracing for additional claims over Covid-19 related to discrimination, the Family Medical Leave Act, or retaliatory conduct for whistleblowers. The workers compensation area of insurance could likely take a hit of claims also.

“Workers compensation is typically a good payer, so it typically is the first thing that workers who are displaced seek,” attorney Dana Bennett said.

In general, workers compensation claims of Covid-19 exposure are not going to be compensable “although that hasn’t stopped the hysteria of exposure claims,” Bennett said. “The claims are already costing businesses money. Employers are reporting and triggering defense costs on claims that probably don’t belong in the system. This is an interesting time for us in the workers comp world.”

Workers compensation claims might involve mental stress from being exposed to the virus, but those are likely not going to get paid. “It would be very difficult to get that claim to survive,” Bennett said. However, in New England a customer of a business allegedly “intentionally inflicted harm” on an employee by coughing on him. “That could rise to a level of compensability,” Bennett said.

A worker generally must be exposed to a level of stress above and beyond what is typically seen in an occupation to have a potentially viable workers compensation claim. In New York City, health care workers and first responders are being put under a “tremendous amount of stress” over who gets safety equipment and who gets treatment. “This is pushing the limits of that for sure,” Bennett said.

The trend is going to move toward more liberal claim payments for first responders and health care workers. “You’re going to get states and systems that are sympathetic to these types of claims. There’s already a trend in that direction,” Bennett said.

New York is already considering amendments to its workers compensation laws to broaden the class of workers covered under Covid claims, which will shift the cost of claims toward the companies and insurance companies, Bennett said.

In California, workers compensation claims will generally be labeled as occupational diseases, while in New York the cases are likely to be considered as accidents, Bennett explained.

“We’re dealing with liberal states and there’s going to be a push to get these claims covered,” he said. Florida, meanwhile, has a heightened standard for workers compensation cases, he said, and has set a “very high bar” for claimants to cross.

With insurance companies facing mountains of exposure, the added worry could be claims for class actions and multidistrict litigation, Joe Welter of Goldberg Segalla said.

“These are going to increase,” he said. “I hope I’m wrong, but we will see well-funded plaintiff lawyers … out to sign up people who have contracted CV.”

In this situation, law firms will begin signing up plaintiffs, and the firms with the most plaintiffs will get the best position on a plaintiff steering committee. “They will control the litigation,” Welter said. “There are lawyers developing these strategies while we speak.”