14 September 2020

CLIENT GUIDANCE: Coronavirus & Public Liability Insurance Cover (Proving Negligence)

By Richard Graham Head of Claims & Risk Management
Executive Summary

COVID-19 has had and will continue to have a significant impact. Despite all of the uncertainty created by the ongoing High Court Test Case, the insurance market has not escaped its impact either. We’re already seeing the characteristics of a ‘hard market’, with insurers applying double-digit premium increases and placing greater scrutiny on which risks they want to write.

Insurers are also starting to apply ‘Communicable Disease’ and ‘Pandemic/Epidemic’ type exclusions to Public Liability insurance.

This latest briefing looks at the issue of businesses moving forward without Public Liability insurance cover in respect to COVID-19 and in particular provides our thoughts on how difficult or easy it might be for a claimant to successfully make a claim.


Simply put, Public Liability claims are triggered as a result of negligence on the part of the policyholder. For a claim to be made on this basis, it would need to be proven that a member of the public contracted COVID-19 as a direct result of the negligence of our client.

The above is however an overly simplistic statement and we need to look slightly deeper to understand exactly what would need to be satisfied for a claim to succeed, and for this the Courts will use the tried and tested four-point test:

  1. Did the business owe the individual a duty of care?
  2. Did the business breach that duty of care?
  3. Did the business’ breach of duty directly cause the injury or harm that is being alleged?
  4. The harm / injury caused was not too remote.

We also need to remember that the burden of proof is “on the balance of probabilities”.

Let’s look at each of these and take a view.

1. Business owed the individual a duty of care?

This should be fairly simple for a claimant to prove. As we know, any business owes a duty of care to any member of the public that visits their premises.

2. Business breached that duty of care?

This is an objective test, which is another way of saying that we would need to establish “what’s reasonable” in light of the particular situation and circumstances. We do not have any case law that relates specifically to COVID-19 (as of yet), although we do have Statutory regulations (including Health & Safety at Work Act 1974) and previous case law that provides a decent framework / guidelines for our clients to follow:

a) The law is concerned with what a reasonable and prudent business knows and what they ought to know when it comes to COVID-19.

b) Businesses must therefore keep abreast of developing knowledge of COVID-19 and not be slow to act.

c) Where there’s greater than average knowledge of the risks associated with COVID-19, the expectation (and duty) is that businesses apply more than average or standard precautions.

d) A business won’t be exonerated simply by proving that other businesses are just as negligent.

e) It’s likely that the standard of what is negligent and what isn’t will be influenced (not necessary decisively) by the practice taken to combat COVID-19 in the client’s specific industry as a whole.

As a summarising statement (and being ultra-cautious in how a Court may rule), in terms of whether a business has or hasn’t breached their duty, it may fall on:

i. Whether there is a failure to take precautions known to be available as a means of combating COVID-19; and

ii. An absence of intuition in seeking out knowledge of facts which are not in themselves obvious.

If found to have fallen below the standard to be properly expected of a reasonable and prudent business owner……then the business will have failed this particular test. There are still two more tests to satisfy:

3. Business’ breach of duty directly caused the injury or harm that is being alleged?

In the vast majority of ordinary and typical situations, this is usually a fairly simple test to satisfy……COVID-19 is far from usual, ordinary or typical!

Despite all of the testing and research that’s gone on in recent months, we still know very little about COVID-19. What we do know is that COVID-19 can be ‘asymptomatic’, meaning that individuals can be infected and a carrier of the disease without necessarily showing unique symptoms (that relate purely to COVID-19). This, and the fact that COVID-19 is highly contagious were the main reasons why the UK Government took the action they did to lock down. Recent research has shown that a high number of individuals who tested positive for COVID-19 never felt sick at all.

COVID-19 therefore has a huge window of opportunity to be contracted and is very difficult to pinpoint against a specific time, day and place. 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) would be extremely difficult.

There are particular clients that need to be wary for this same reason – with Residential Care Homes or Residential Private Schools, the ‘infection’ window is wider and there are less potential ‘other’ sources of infection. For such clients, the verdict would not necessarily be damning, but if it was proven that the client clearly breached their duty of care and there were a number of claimants (all making the same allegations) then there is potential for a claim to be brought and significant legal costs incurred.

4. The harm / injury caused was not too remote?

We believe claimants may struggle to establish that the harm was not remote. It will be very fact specific and there are so many variables and the position is going to be far from clear in the vast amount of cases that it may well not have been reasonably foreseeable that a claimant would not have contracted COVID-19 but for the business’ breach of duty.

It may not be foreseeable that an individual would contract Covid-19 in a retail shop because, for example, the shop failed to wipe down the rail of suits just before that individual started browsing through them. Moreover, even if such a risk existed and was foreseeable, that individual chose (and was not forced) to enter the shop and touch the suits.

There are a number of circular arguments, all of which will turn on the facts.

What does this mean for you?
  • Whilst you may currently have insurance cover for COVID-19 under your Public Liability insurance (check your policy wording), it most probably won’t stay that way for long! Due to pressure from Reinsurers, most policies will have these ‘pandemic / epidemic’ type exclusions applied at renewal. Even where not, it is likely that they will be applied mid-term (the timing of which will fall in line with insurers’ renewal of their reinsurance).
  • General consensus is that it is highly unlikely that an isolated claim from a member of the public would be successful in the vast majority of situations. That said, some will try and as we know, regardless of the low prospects of success, legal costs may be incurred.
  • It’s clear that clients need to be proactive when it comes to safeguarding both employees and members of the public. Clients can discharge their duty through:
  1. Risk Assessment – Clients have a duty to undertake a suitable and sufficient risk assessment to identify risks to the health and safety of employees and members of the public.
  2. UK Government / expert advice – a reasonable employer and business will ensure that it closely monitors advice from the UK Government, industry bodies and relevant experts and use the information to inform and update the risk assessment and take necessary steps (quickly) to keep employees and members of the public safe.
Aston Lark COVID-19 Business Recovery Toolkit

We want to support our clients during this difficult time. Back in March we introduced our COVID-19 Business Recovery Toolkit, which provides our clients with a range of information, advice, support and tools (as well as templates): https://www.astonlark.com/roadtorecovery

If you require any other assistance or advice, please do not hesitate to get in touch with your usual Aston Lark contact.

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