Research conducted by Gallagher earlier this month has found that businesses continue to feel significantly unprepared for the steps they need to take to protect their business, employees and clients from issues relating to COVID-19.
Business Leaders

The research, amongst the business leaders interviewed found that nearly half (45%) admitted they are unprepared for the health and safety measures that need to be put in place and a third (33%) said that they are unsure of their responsibilities as an employer. As a result, 52% say being sued by someone who becomes ill on their premises is a major concern.

When looking at the driving factors behind this, the majority of businesses (72%) admitted that social distancing is a significant practical challenge and a similar number admitted it is also challenging from a financial perspective (66%). This reflects insight from Gallagher’s risk assessment validation service as over 75% of businesses that have used it found that their preparations did not meet Government guidelines*. This leaves them potentially without a strong defence in the event of facing legal actions, insurance claims and enforcement action by the authorities.

The research was conducted amongst businesses of 250 employees upwards, and although there were similar levels of worry across the board, mid-sized businesses between 500 and 999 employees reported the highest levels of concern, with six in ten executives (59%) citing fears of being sued. Bosses in sectors particularly worried about claims being made against them include construction (74%), education (60%) and hospitality (60%) reflecting the complexity in ensuring adherence to the guidelines when managing busy sites and premises.

Commenting on the findings, Neil Hodgson, Managing Director, Risk Management Solutions at Gallagher said: “As we reopen society it is clear that many business leaders are experiencing sleepless nights worrying about the measures that need to be put in place to protect them and their business. Clearly there is a lot to think about from a customer and employee perspective, and different businesses will need to interpret the guidelines in different ways.”

Risk to businesses

As well as fines by the authorities, businesses could leave themselves open to claims from employees and customers in the event they contract COVID-19 on the premises and it can be proved they haven’t prepared properly.

From an employer perspective, failing to take reasonable measures to safeguard employees, such as staff being required to work in close quarters or with insufficient protection, could result in an Employers’ Liability claim being made.

When it comes to protecting customers and avoiding Public Liability claims, businesses need to be able to demonstrate they have followed the Government guidelines in terms of ensuring only a certain number of customers are in the premises at any one time and social distancing can be followed.

Neil, added; “Businesses need to ensure they are keeping abreast of current Government advice and changes in the law, assessing the business risks as a result of any changes implemented due to the pandemic, regularly reviewing risk assessments due to the changing nature of the pandemic, and keeping a paper trail of risk assessments to evidence the considerations taken. Our health and safety consultants can work alongside management to review actions taken and advise accordingly. Having a validated and successfully implemented COVID-19 risk assessment will enhance a business’s mitigation and defensibility should an incident occur at the workplace, and avoid further potential repercussions.”

* From 18 May – 30 June: 110 of 145 businesses failed, equal to 75.86%.

All data unless otherwise stated from research conducted by Opinium, between 26 June and 3 July, amongst 1008 senior decision makers in businesses employing over 250 people.

This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. It reflects our understanding as 23/07/2020, but you will recognise that matters concerning COVID-19 are fast changing across the world. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. Our advice to our clients is as an insurance broker and is provided subject to specific terms and conditions, the terms of which take precedence over any representations in this document. No third party to whom this is passed can rely on it. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law. Should you require advice about your specific insurance arrangements or specific claim circumstances, please get in touch with your usual contact at Gallagher.