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Addressing the COVID19 Risks of Your Third-Party Service Providers and Vendors

States are reopening – find out which ones here. As they do, organizations will begin and/or continue adhering to a complex set of distancing, screening, capacity, sanitization, mask, posting, reporting, and other guidelines designed to maintain COVID19 curve flattening efforts. For organizations with operations in multiple states, the patchwork of federal, state, and local “guidelines” becomes even more complex. For organizations that tackle these guidelines, their job still may not be complete.

The risk of COVID19 infection in areas such as on a salesfloor, in common areas of an apartment complex, on a loading dock, or in an office environment is not limited to the members of an organization’s workforce or its customers or clients. Virtually all organizations rely on third-party service providers or vendors, directly or indirectly, to operate efficiently, including those providers and vendors. In a retail business, service providers or vendors might include delivery companies, manufacturer representatives, temporary staffing companies, and IT support services. Senior living communities might have similar service providers or vendors as retail businesses, along with landscape companies, building maintenance technicians, and equipment suppliers. The same is true for professional service providers, whose service providers or vendors also could include office equipment maintenance providers, window and office cleaners, food service providers, and transportation vendors.

As organizations develop policies and devise procedures to address COVID19 in their facilities, they should be taking their third-party service providers or vendors into account, especially when the workforce members of those entities will need to interact with the organizations’ employees, customers, clients, etc. How to do so presents some difficult questions and additional challenges. Some organizations may want to (or be required to) play a more active role, such as screening a vendor’s employees before being permitted to enter the organization’s facilities. Others might prefer to rely on the vendor’s compliance efforts. Either way, these decisions raise critical health, liability, insurance, public relations, operational, and business issues.

Depending on how organizations decide to approach the risks posed by third-party service providers or vendors, below is a checklist of items an organization might want to cover with respect to each of those entities.

  • Modifying the delivery of products and/or services to minimize COVID19 risk.
  • Compliance with all applicable federal, state, and local COVID19 guidelines, including those specific to the organization which may not be applicable to the service provider or vendor, and including changes to those guidelines and best practices as the pandemic continues to evolve.
  • Allocating responsibility for COVID19-related issues, such as reporting, exposures, liabilities, etc. For example, organizations may want to confirm whether they or their service providers are responsible to provide personal protective equipment (PPE) in the organizations’ facilities. Organizations also may want to reevaluate insurance coverage requirements, indemnification provisions, and limitation of liability clauses to ensure they align with a changing risk landscape due to the pandemic.
  • Ensuring service provider and vendor workforce members are aware and trained on the organization’s applicable COVID19 policies and procedures including without limitation social distancing, sanitization, screening, cleaning supplies, contact tracing, and other measures.
  • Administering screening/testing for all vendor or service provider workforce members prior to entering the organization’s facilities, and who is responsible for carrying it out.
  • Arranging for communication and reporting of COVID19 symptoms, or infections or likely infections in order to carry out contact tracing. As contact tracing efforts expand, many organizations are considering different approaches such as contact tracing apps. Depending on the circumstances, having service providers use the same contact tracing app could enhance the organization’s efforts.
  • Pushing service provider and vendor’s obligation downstream to their agents, subcontractors, and third-party service providers where applicable.
  • Ensuring cooperation and consistent communications in the event of any investigation concerning COVID19 infection believed to be at the organization’s facilities.
  • Maintaining a process to assess compliance and appropriate record keeping. Some organizations may want to be able to review a service provider or vendor’s record keeping to show they have been complying with applicable COVID-19 guidelines.
  • Confirming that service providers and vendors have hardened their privacy and cybersecurity protections as ransomware, business email compromise, and other attacks are on the rise with COVID-19 and could result in business interruption. Much of this post relates to increased physical interaction as organizations reopen. However, significant segments of the workforce will continue to work from home, including service providers and vendors, extending these heightened risks.

A “compliance with all applicable laws” or related clauses in the service provider or vendor’s master services agreement (MSA) likely will not be sufficient to address many, if not all, of these issues. COVID19 implications are far reaching, affecting the provision of services, service level agreements, costs, liabilities, etc. Organizations and their service providers and vendors may need to rethink certain provisions of their MSAs to address the new reality of how products and services are provided and performed during the coronavirus pandemic, including amendments that outline specific COVID19-related operational issues, practices, etc

Jackson Lewis P.C. © 2020National Law Review, Volume X, Number 139

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About this Author

Principal

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently helps to co-lead the firm's Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals.

In short, his practice focuses on the matrix of laws governing the privacy, security and management of data, as well as the impact and regulation of social media. He also...

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