As Covid-19 losses continue to bite, New Dawn Risk’s senior treaty broker Rachel Cohen expects to see casualty treaties in 2021 impacted by an accelerating hardening of reinsurance rates, restricted terms and conditions and reduced capacity.
While there are already several US D&O class actions related to Covid-19, liability claims are typically long-tail with a lag in reporting, so Cohen notes how general liability and workers’ compensation claims have yet to filter through.
“However, we predict that there will be a significant rise in these loss notifications starting in 2021 and continuing over the next few years,” Cohen said.
“Several outbreaks of coronavirus have already been linked to high-risk environments, such as gyms, hotels, casinos, care homes, cruise ships or food/meat processing plants.
“There is a significant likelihood that all these environments will be sued for not taking proper care of their clients, either by allowing them to enter against the government rules, or by failing to provide a Covid-19-safe environment.”
Cohen explained how the same situation will apply to workplaces, resulting in a rise in employers’ liability/ workers’ compensation/employment practices liability claims, due to companies not taking the adequate steps to make their workplaces Covid-19 safe or forcing their employees back into the offices unnecessarily or against their will.
“There are already liability losses affecting cruise line companies where passengers brought the Covid-19 virus back onto the ship after a day trip, as staff did not adequately assess them before allowing them to re-embark,” she added.
“We expect more of these claims to come to fruition within the next year or so, with a knock-on effect in terms of pricing and coverage for reinsurance treaties.”