General Liability and COVID-19

Opinion by Sharon Deetlefs, Broking Manager: Broking Centre at Aon South Africa

General Liability policies provide the Insured with cover for legal liability arising out of the performance of their business. In other words, the policy covers the liability of a company, or an individual, for damage or injury they may cause to a third party as a result of their negligent conduct. A typical example is that of “slip and fall” claims, where a visitor to a business premises may fall and injure themselves as result of a wet floor.

In a similar way, a business may potentially be sued for negligently exposing others to COVID-19.  It will however be difficult to prove negligence in the event of the spread of the virus.  The third party would need to prove that the insured did not take the necessary steps to contain the spread of the virus, and that they had been infected as a direct result of the insured’s actions.

General liability policies could potentially respond to third party claims regarding the negligent release of or exposure to COVID-19.  However, it must be noted that it is not the intention of general liability policies to cover the spread of contagious diseases such as COVID-19 or even the flu. 

Policies also exclude liability arising out of the deliberate, conscious and intentional disregard by the insured's management of the need to take reasonable precautions to prevent any event or circumstance which may give rise to a claim.

One of our local liability insurers has already indicated their intention to include the following General Exclusion on all renewals and new business going forward:

CORONAVIRUS

arising out of any claim, loss, injury or damage in any way caused by or resulting from:

a)       Coronavirus disease (COVID-19);

b)      Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2);

c)       any mutation or variation of SARS-CoV-2;

d)      any fear or threat of a), b) or c) above.

As the pandemic worsens, more insurance companies are likely to start adding similar exclusions that will eliminate the possibility of any coverage for COVID-19 claims.