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March

How Will COVID-19 Impact Your Commercial Agreements

As more and more business embrace remote working capabilities to cope with the threat posed by COVID-19, one should be mindful of the various ways in which the virus may impact their commercial arrangements and regulatory requirements. While we are also learning the full extent to which the COVID-19 will impact us on various areas, we recommend revisiting the below areas to assess the potential impact of COVID-19:

Impact on Commercial Agreements

The global economic and regulatory impacts of the COVID-19 are likely to create serious repercussions in commercial agreements for many companies across various industries. The impact of the virus on your business and under a specific contract will have to be evaluated on a case to case basis with the help of a legal expert. You can start by reviewing which contracts may be affected by the COVID-19 and identify relevant clauses, such as:

  • “material adverse event” or force majeure clauses – Assess whether the current circumstances permit any party to assert any ground for avoiding or pausing performance under the contract;
  • notice requirements – Review whether you need to give any notice or check if other provisions exist within the contract that may need to be triggered in order to assert your contractual right or defense;
  • clauses relating to a “change in law” – such as declaration of “national emergencies,” by any country;
  • termination rights and conditions;
  • dispute resolution provisions

Always bear in mind the strategic and commercial considerations when deciding whether to take certain steps. Also, check with your insurer whether your loss of profit insurance may cover any losses suffered due to the COVID-19 outbreak.

Impact on Employment Contracts

The outbreak of the COVID-19 presents a number of employment-related considerations. Employers should prioritize the health- and safety-related impacts on the workforce.

If an employee contracts the virus, you must consider how to communicate this information to potentially exposed employees while protecting the privacy of the employee with the infected. Employees who contract the virus while on duty travel or at work may be entitled to benefits under workers’ compensation insurance.

Employees should be regularly informed about any existing and update in policies, programs and practices that may be impacted by COVID-19.

Cybersecurity and Customer Commitments

With the potential for lockdown of cities in order to prevent or slow down the spread of the COVID-19, many companies may decide to implement or expand employee work-from-home programs in the coming days. While these programs allow for business continuity, they also pose increased cybersecurity risks by creating several avenues for unauthorized access to company systems and information. Hence, companies must ensure necessary cybersecurity policies are in place to ensure customer commitments prior to initiating or significantly expanding remote working capabilities.

Additionally, data management policies and policies that govern the acceptable use of company systems are essential. The ease of access to personal services and devices coupled with insufficient cybersecurity protections or noncompliance with company data management policies can create significant threats of data leakage or unauthorized access to your internal or customer data.

Companies should also keep in mind the applicable privacy laws (like GDPR) when collecting information about employees or customers which you are additionally collecting, such as health records and travel itineraries. If you would like to know more facts about the COVID-19 virus and figure out how it would impact various aspects of your business get in touch with us.

For more insights on how to mitigate COVID-19, download COVID-19: Impact on your business

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