General public or products liability – risks & insurance issues from COVID-19

These policies protect the business for legal liability during the provision of their services and products. The policy covers claims by third parties for personal injury and property damage and pays defence costs and damages.

Industries susceptible to public interaction on their premises must develop pandemic plans. A failure to do so may give rise to personal injury claims by persons who allege that they attended “insured” premises during the COVID-19 pandemic and contracted it whilst on those premises. Industries such as accommodation, shopping centres, pharmacies, hospitals, strata schemes, property owners generally, public authorities and educational institutions should develop these plans.

Our expectation is that the frequency of bodily injury claims brought by third parties (infected by COVID-19) will increase.  If a business has failed to develop a “pandemic plan”, it is arguable that they could have failed to appropriately manage or warn of the risks of COVID-19.

Steps to take
  1. develop a pandemic plan - seek external advice regarding the adequacy and communication of same.

  2. premium relief – premium is rated on turnover, imports/exports, wages and staff numbers for the forthcoming period. If the company expects a reduction in any of these, it may be able to seek premium relief. Your broker should be able to guide you in relation to an appropriate declaration. It is important however not to under-declare; doing so may affect the payment of claims under your duty of disclosure. Some insurers have agreed to provide deferred payments of up to 6 months for small businesses experiencing financial hardships.

  3. cancelling policies - many industries now closed for “lock-outs” have asked whether cover is required (given there is no trading at present on their premises). Regard must still be had to the range of exposures covered by the policy (which will vary from industry to industry). By way of an example, a property owner/lessee whose premises is not being used may still have legal liability to third parties for injury or damage in connection with the premises: consider a leak in a commercial building causing damage to adjoining third party property, or, otherwise somebody injuring themselves on “common property”.

  4. coverage – it is recommended that you check whether there is an infectious diseases exclusion on your policy. You should also check whether there is an “unoccupied property” exclusions – insurers may start to impose these on renewal.

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