Covid claims and insurance challenges ahead
Employers and those “in control of premises”, as defined by the Health & Safety at Work etc Act and its associated Regulations, have numerous legal duties concerning safe, healthy and well-managed premises. Where failure to do so leads to accidental injury, death, disease, illness or property damage, Employer and Public liability insurance may help pay for the resulting legal costs and compensation. If the accident or incident leads to an HSE prosecution, any fines suffered when prosecuted by the HSE (criminal) would not be insured and payable by the company or individuals involved.
What happens if a claim occurs alleging that your business has failed in its duty of care to safeguard third parties against injury or illness arising from Covid-19 or Long-Covid?
Many involved in considering risk, whether as an actuary for a major corporation, an insurance underwriter, employer, landlord, tenant, professional advisor, or small business owner, take the view that COVID-19 has a huge window of opportunity to be contracted outside the workplace or premises visited and so, it would be very difficult to pinpoint against a specific time, day and place that an infection occurred. Even if this were not the case, a claimant proving that a business’ breach of duty directly caused their condition (given the many other potential sources of infection) could be extremely difficult.
Paul Waldeck, Technical Director at infection control experts PPL-Biosafety, commented, “Save for in those more residential/longer-term occupational types of settings, such as in care homes, boarding schools or hospitals, proving that a claim for death, personal injury or loss arose from a single Covid-infection incident may indeed be very difficult because the infection could have been picked-up almost anywhere in the days before attending workplace or visiting someone else’s property. However, if multiple infection cases occur simultaneously or occur regularly on that premises or in that workplace, this indicates that there may well be a possible shortfall in the prevailing mitigation measures and/or a business’ compliance with guidance.”
“There has been an assumption that Covid-19 was only going to be unusual, a one-off, a short-term exceptional incident & workplace risk. Two years on, governments, regulators and institutions around the world are telling their populations that we are all going to have to live with Covid for the foreseeable future. Others refer to the disease as endemic, in other words, the risk will always be with us.”
This change in stance from policymakers changes the dynamic on compliance and risk management; moving from what may have been considered acceptably reasonable and proportionate in the shorter term, to now a position of being more appropriate to revert to the long term, harder stance with strictly ensuring all necessary compliance measures for health, safety and welfare of those occupying the workplace, premises or modes of transport, “insofar as is reasonably practicable”, to quote the HSWA 1974.
Paul then went on to raise a matter of major concern, “the invisible elephant in the room that is often overlooked, or taken for granted – the statutory need for “Adequate Ventilation”.
The original legislation has not changed during the pandemic and whether it be a variant of this or any other types of Coronavirus, Influenza, Legionella, Fungal Spores, TB, or any other airborne pathogenic hazards similar to these. We also have other airborne contaminants and interior air quality risks to consider concerning HSWA 1974 and the various Workplace Regulations.
The legislation and supplementary approved codes of practice require that the indoor air within premises and the workplace must be delivered in sufficient quantities, be fresh or purified, clean, uncontaminated, free of impurities that may cause harm or risks to health.
It has been difficult through the pandemic for all involved with risk management to pin down what the UK’s HSE terminology, “Adequate Ventilation” actually means, could-be or should-be in a more definative way. Many other institutions around the world have been more prescriptive, pointing to ventilation of 4-6 fresh Air Changes per Hour; 10-15 litres/second/person of fresh air delivered; or adopting surrogate measurements such as 600-800ppm of CO2 as a decent indicator of ventilation adequacy.
Paul pointed out that the recently published updated legislation, Building Regulations-Approved Document F: Ventilation, applies to buildings other than dwellings and accelerates the need to act. These new regulations will now give an additional reference point to those involved in risk management because these are well defined and prescriptive. Crucially, by inference, Paul says that “In our opinion, whilst the amended Building Regulations Part-F applies to new buildings, or buildings that are being altered, or extended that fall within the new Part-F’s applicability, one can assume that claimants will now seek to establish that existing buildings are inadequate when it comes to ventilation.”
“This will probably be an open goal in many cases because much of the existing built environment will be inadequate when it comes to comparison with the elevated ventilation requirements stipulated in the new standards, which is a clear marker of what “Adequate Ventilation” should look like in the UK context.”
The Building Regulations were updated by the Government’s SAGE, in recognition that the SARS -Coronavirus-2 that causes Covid-19 is primarily an airborne pathogen and adequate ventilation is crucial mitigation to dilute and decontaminate indoor spaces to prevent or control infection risk. These new regulations, coupled with those historic statutory instruments that the HSE audit and enforce against, along with how insurers may consider claims in the future, as a result, may not yet have been considered by stakeholders.
Taking a look at some of the other Covid related risk aspects in more detail:
There has always been a duty of care to protect people on your premises and those you employ from harm, but the threat of coronavirus has alerted the world that interior environments such as transport or buildings have the power to make us sick or keep us well. Adding in the complications of management policies, “adequate ventilation”, PPE & masks, social distancing, signage, enhanced hygiene, risk assessment arrangements, further training, and the need to account for those who are vulnerable, those returning to the physical workplace rather than working from home but also, there is now a heightened awareness of the issues around mental health & well-being too.
Maintaining risk management controls and safe systems of work is critical to mitigating risk. These processes need to be well documented, regularly monitored, consulted upon and reviewed where they apply to all working environments, premises, and for site work, deliveries, and travel arrangements.
All of these can be used as evidence should it be necessary to defend compensation claims or avoid enforcement for breach of duty.
The 1969 Employer’s Liability (Compulsory) Insurance Act and associated regulations require every employer carrying on business in the UK to insure against liability for “bodily injury or disease” sustained by its employees where that arises in the course of that individual’s employment.
Although it is unlikely that insurers will look to exclude Covid-19 from this compulsory form of insurance, employers should check the terms of their employer’s liability policies carefully as failure to insure in accordance with the Act is a criminal offence. Furthermore, it could mean that employers are at risk of a recovering claim from their insurers, as the regulations allow for rights of recourse by insurers where the employer has breached its duties to its employees or failed to comply with its statutory duties, including its duties to protect adequately against the risk of contracting Covid-19.
The protective measures you need to consider depend on interactions with non-employees and on the premises that you control, are fairly similar to those for your employees. There are guidelines on the HSE website but quite simply, you have a duty to prevent harm to others and you will need to consider contact and interactions with other parties including visitors, customers, suppliers, products, and the general public. These may include:
- Site work
- Visits to customers’ and suppliers’ premises
- Customers and suppliers visiting your premises
- Products – despatch and delivery
As regards insurance cover, the majority of Public Liability policies should usually provide cover in respect of liability to third parties, but given the ongoing Covid risks, some insurers are applying exclusions or restrictions as policies become due for renewal, so one should read the policies carefully and your renewal terms, particularly with respect to references to workplace compliance, pathogens, infectious/communicable diseases, pandemic, epidemic, coronavirus and Covid-19. This caution on policy wording also applies to Employer’s Liability Insurance and importantly, it is a criminal offence.
For a breach of duty of care to be considered, or potentially, insurance terms compromised, the employer, or those persons in control of premises would need to be in contravention of legislation, government guidelines, recognised institutional advice, or best practice regarding health, safety and welfare at work. There is no case law (as yet) but the provision of adequate ventilation has been overlooked thus far as a tool to open up claims, particularly now that Covid is no longer considered to be an exceptional short-term challenge, but a long term risk that we have to learn to live with. Any new legislation, or the leveraging of standards such as the new Building Regulations (AD F Ventilation) will heighten claims risk, and so, the market needs to react appropriately.
Employers, facility managers, property owners, and tenants should re-visit and audit the ventilation arrangements and engineering HVAC infrastructure in the spaces that they occupy or the premises that they control. Investors, actuaries, underwriters, and risk managers have become acutely aware of the extensive and costly impact of inadequate building specification (cladding materials and fire risk) in recent years because of the horrific Grenfell incident and the findings of the Hackitt Inquiry. Infection resilience will protect human and physical assets against Covid and whatever may come next. It is in the interests of all stakeholders to understand better, the adequacy of ventilation sytems within their property portfolios, sooner than later.