In the days before lockdown, 45 new firms were incorporated with the word ‘corona’ or ‘COVID-19’ as part of their name, including “COVID-19 Virus Compensation Ltd”, “Coronavirus Claims Ltd” and “Coronavirus Compensation Ltd”.
This is just one piece of anecdotal evidence indicating that claims management companies are anticipating that coronavirus will be a significant driver of claims.
It is important to appreciate the rapid escalation of the pandemic in the UK because this would influence the future claims picture. From the first registered case on 31 January and first death on the 2 March, the number of positive cases in total had grown to over 400,000 cases and 41,825 deaths as at 22 September, and sadly cases continue to rise at the time of writing.
From an employers’ liability (EL) and public liability (PL) perspective, COVID-related claims will come from a wide range of sources, although not all will have merit.
On 15th September, the High Court handed down its judgment in a test case brought by the UK’s Financial Conduct Authority (FCA) on whether a sample of business interruption (BI) insurance policies provide cover in the context of the pandemic, ruling that some but not all of the disease and denial of access clauses in a sample of BI wordings did indeed provide cover.
The case is likely to be appealed, and individual claims outcomes will depend on the detail of the wordings on a case by case basis. Clearly, it is important to continue to give due consideration to all policy wordings.
A range of impacts
The data shows comparatively high death rates in care homes and healthcare as well as some occupations which are more of a surprise, including bus drivers, chefs and security guards. For claimants who have recovered from the virus it is now anticipated there could be long-term health impacts.
From a public liability perspective, care homes are again expected to be significant drivers with residents and relatives/visitors among the potential cohort of claimants. Family members of EL claimants could also drive claims along with individuals who contract COVID in spaces where restrictions have not been adequately enforced (eg shops/pubs/restaurants).
Upper limb disorders from poor workstation set-up or stress claims due to increased workloads and greater job uncertainty may increase. The market could see more bullying and harassment claims, with the behaviour of managers or colleagues much harder to regulate than they would be in an office.
At the same time, COVID may have slowed or prevented treatment for non- Covid claimants, potentially increasing claims cost.
Meanwhile, lockdown has had a broader impact on the civil claims process with courts closed and trials adjourned. Lockdown has hindered the progress of claims – and this almost always increases the ultimate cost.
However, the pandemic crisis is also proving to be a catalyst for some positive changes, particularly the move away from manual, paper-based claims processing. We are seeing an increased use of electronic claims management systems as well as the use of remote investigations, even remote medical examinations, which have the potential to improve claims management efficiency if properly controlled.
Much still unknown
Nevertheless, as a partner at law firm told the Pro claims team at a recent briefing, at the current stage there are more questions than answers in terms of how the COVID claims experience will unfold and what the ultimate quantum could be. The area perhaps most immediately susceptible to claims surrounds the discharge of patients into care homes and inadequate testing of those discharged.
“We are fully aware that over 50% of the deaths from COVID-19 occurred in care homes and a large part of those deaths were as a result of patients being discharged into care homes from NHS hospitals back in March and April this year to make way for the anticipated surge in need for hospital beds,” he said. “As a result of that, efforts are underway to secure indemnity from the government for care homes.”