Your Liability Exposure in a Covid World

What’s new, how will things change?

We are in the midst of an era of uncertain times and with uncertainty, comes many unknowns. During this time, businesses confront ambiguity and change on a daily basis, making it difficult to predict how and where your business will operate and how you will engage with your customers.

We are sitting in at a fascinating junction in the history of work. There are new rules and new ways of working. A wave of change is coming that will soon make the way we work almost unrecognizable. As long as the risk of exposure to COVID-19 remains, businesses face potential liability, clients and customers will have heightened expectations of safety and cleanliness, and you will need to be mindful of:

• Employees’ safety at work,
• Employees’ safety when they are out and about and the safety of others who engage with them,
• The safety of customers, clients and contractors that visit your premises,
• Product safety and cleanliness.

What should you do?

It is an ideal time to re-look at risk mitigation and how you manage your liability risk. Are there ways you can improve on what you already have in place? If something goes wrong will the cover that you have help you? Broadform liability covers you against your legal liability to third parties for property damage, injury, disease and death.

Businesses have started to reopen which will result in third parties entering their premises. Do businesses face any liability risks should outside people enter a business premises?

Absolutely, if a third party is infected with COVID-19 as a result of a business failing to take reasonable care such as, failure to communicate public health advice to employees, not providing hand sanitizers, or not cleaning the place properly or allowing staff to enter the work premises without having masks on, then they can be held liable. The person claiming would have to show that they got infected at the specific premises and that the business failed to take reasonable precautions. This will be hard to do.

What about employers’ liability, will employers be liable to employees who get infected at work?

There has been debate on being able to claim from Compensation for Occupational Injuries and Diseases (COID). Normally it is only for an occupational related disease, so you couldn’t claim if you got bad flu at work. On this basis, only health workers would generally be able to claim for COVID-19. But it now looks like you can claim from COID if you can show you got infected while at work. If you can claim from COID, then what should follow is that you can’t claim from your employer. If you cannot claim from COID, then you can claim from your employer, but you would have to show that the infection aroused from exposure to COVID-19 as a result of negligence or failure on the part of the organisation to put in appropriate measures or plans. Provided there is no exclusion for COVID-19, an Employers’ liability section in a Broadform policy will respond to defend you against a claim. Insurers may use a no negligence argument to dispute the claim. Subject to the policy’s terms and conditions and the specific situation, the policy would typically pay legal costs, and the indemnity if you are found liable.

So how much cover should I buy?

The indemnity in a policy includes legal defense costs up to the full limit, as regardless of whether you are liable or not, you will need to defend a claim against the business with the help of the best possible legal team. It’s important to ensure that the limit you buy is sufficiently high to allow for these legal costs as well as any indemnity that needs to be paid to settle a claim.

Will my policy exclude COVID-19?

COVID-19 and communicable diseases are being excluded on most policies by insurers as and when they renew the policy or on new business. However, come and talk to us, we can explain our stance and how you can ensure your risks are managed and depending on the risk, we may offer the option of legal defense costs and in the event of a COVID claim. You are then able to avoid and defend a claim where you are not liable.