The physical symptoms of those severely affected by COVID-19 are well-documented. However, there is increasing evidence of psychological consequences resulting from being hospitalised as a result of COVID-19, given the "very frightening and invasive" experience reported by many, as well as the unique nature of the pandemic, required patients to be isolated from their family.
University College London has also recently reported that individuals who experienced a COVID-19 infection were subject to a higher than expected risk of subsequent neurological conditions, nerve damages and temporary brain dysfunction. The Royal College of GPs has also provided anecdotal reports of an increase in COVID-19 patients suffering from anxiety, depression and trauma, and other symptoms of Post-Traumatic Stress Disorder.
This presents a risk to insurers. Those claimants who wish to pursue a claim for contracting COVID-19 against a third party (whether their employer or otherwise) are much more likely to plead any consequential physical or psychological injuries as part of their losses, leading to an inflation in the value of claims.
The most significant hurdle for claimants will be proving that the alleged negligent actions on the part of a third party caused their injuries. COVID-19 has been shown to have a variable incubation period, meaning that all potential claimants will be subject to questions as to how the disease was transmitted, particularly with increasing evidence of airborne transmission. It is highly unlikely that many individuals will be able to pinpoint the source of their infection. Therefore, an individual alleging consequential physical or psychological symptoms resulting from a COVID-19 infection will not automatically have a valid claim.
Those individuals who worked in professions which continued to operate 'as normal' during the lockdown period may find proving negligence easier, especially if there are no possible causes of infection and judges are able to properly infer causation. Evidence of a significant proportion of other staff members having the infection is also likely to be important in this regard. At risk professions include the healthcare and transport sectors, those working in the food services industry, and warehousing for online retailers.
However, those organisations may argue that they have a defence to any claim alleging negligence resulting in the transmission of COVID-19 if they have followed the appropriate official guidance at the time of the alleged infection and/or there is any evidence of contributory negligence on the part of the claimant, such as omitting to wear PPE or failing to adhere to social distancing measures.
Nonetheless, it is possible that a limited proportion of claimants may be able to establish negligence on the part of a third party. In instances where the claimant has suffered serious consequential physical issues and/or severe PTSD following a COVID-19 infection, these claims will require careful management and consideration of the available medical evidence.
Notwithstanding issues about liability and causation, insurers would be well advised to ensure that rehabilitation and care services are considered at an early stage to aid the recovery of the claimant and mitigate overall losses. The Serious Injury Guide provides an example as to how the claimant should be placed at the heart of the rehabilitation process whilst issues of liability are addressed.
Insurers should be aware that claims with a psychological element may be just as likely to arise in claims where the individual suffered a mild case of COVID-19. Given the knowledge of the risks inherent from a COVID-19 infection, it is not a surprise that many people will consider it to be a traumatic experience. However, insurers should be alive to the risk of PTSD claims being added to modestly valued claims alleging infection as a matter of course.
Such an addition would have the effect of inflating both the value of the claims, and also bring about greater costs entitlement, as has been routinely seen in the motor claims market. There are already examples of companies being established with the aim of pursuing COVID-19 compensation claims, and therefore the behaviours and marketing of claims management companies will need to be watched closely.
This area will continue to progress in the coming months, and we expect that further literature and empirical evidence on these issues will be published in due course which is likely to inform developments in this area.
In the meantime, insurers need to be aware that any claims alleging exposure to COVID-19 are likely to include additional injuries, whether physical or psychological, with associated care requirements. Where such allegations are made, insurers will need to carefully examine the allegations and evidence, as well as reserve appropriately. Despite the need for dealing with claims such as this in a sensitive nature, insurers should still investigate fully and ensure that all preventatives measures are taken to ensure the alleged losses are mitigated.
This article was originally published in Insurance Edge on 15 July.
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