While the initial focus of COVID-related claims has been on business interruption and the well-publicised dispute between policyholders and insurers, a second wave of COVID-related liability claims is set to hit businesses on the employee and public liability side.

Tuesday 22 September 2020

14:00: Session: COVID-19: Liability claims spike

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Addressing people risks and healthcare during a workshop at Airmic Fest, experts from Marsh and Mercer warned that delays to the treatment of medical conditions and the detrimental impact of lockdown on mental and physical health were set to result in a new wave of liability claims.

“The UK has an extremely well-organised and well-resourced claims industry,” said Mike Russell, head of Non-Specialty Claims at Marsh. “It is currently relatively silent, but it is unlikely to stay that way.”

He anticipated that liability claims would fall into three main categories: musculoskeletal issues (MSK), mental wellbeing and contraction of COVID-19. It is early days still as far as the pandemic is concerned, and doctors are just beginning to understand some of the longer-term health implications.

He advised risk managers to review all risk assessments and update them accordingly to reflect the change in risk the pandemic has introduced, adding that a standalone risk assessment for COVID on its own was a wise consideration.

“My personal belief is that sooner or later that industry will begin to kick in and we will probably see some liability claims coming in. First waves are likely to be the NHS, care homes and those employers unfortunate enough to have suffered localised outbreaks on their premises.”

Due to delays in treatment introduced by the pandemic, conditions may have gone untreated for a sustained period of time and this can contribute to claims severity when it comes to employee liability, explained Chris Bailey, head of corporate at Mercer Marsh Benefits. This is likely to result in a spike in patient need and backlog of private healthcare claims.

“Claims that would have taken place during lockdown will take place now,” he said. “Low cost rapid access services like physiotherapy have been disrupted, so we’re now playing catch up. The impact is more invasive treatments, increased costs and higher recovery times for patients.”

As employers and risk managers prepare for the inevitable increase in liability claims, clear communication channels with employees is a simple yet important way of mitigating this risk.

Carefully explaining safety procedures while working from home and properly supporting staff is a number one priority, said Russell, noting that “a happy, motivated and engaged workforce is less likely to bring claims against their employer”.

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