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COVID-19 and claims defensibility in the UK food and drink sector

Risk & Analytics|Corporate Risk Tools and Technology|Risk Management Consulting
COVID 19 Coronavirus

By Jason Burt | April 9, 2021

This insight explores the impact COVID-19 has had on the food and drink sector.

The Health and Safety Executive’s (HSE) health and safety at work summary statistics for 20201 showed that the food and drink manufacturing sector had a higher number of workplace injuries than the national average. This is particularly concerning as it could result in the sector becoming the focus of more regulatory investigations and prosecutions in the future. Aside from the obvious and crucial need to keep people safe at work, successful health and safety prosecutions can have a significant, adverse impact on the financial performance of any business. Within the early part of this year, a leading UK food manufacturer received a fine of £640K and was ordered to pay £26k costs, when one of its employees had his hand trapped in a machine.

Good health and safety governance must be led from the top and it is the responsibility of directors and managers to ensure that the company’s safety rules are robust and followed.

Being a ‘standout’ sector in terms of injuries is troubling in its own right but coupled with the heightened scrutiny it has received in terms of COVID-19 cases, its issues may be seen as a sign that greater regulatory scrutiny is required. Indeed, it is already possible that the food and drink sector may face a focused review of its reporting of COVID-19 cases, following publication of a report by Pensions and Investment Research Consultants Limited (PIRC) during the latter part of 2020 which suggested that the number of COVID-19 infections in food factories may be 30 times higher than actually reported.2

RIDDOR reporting is a major concern for all businesses for a number of reasons. Firstly, it is an offence to breach the RIDDOR reporting requirements and so businesses need to be in a position to justify their decision-making processes in the event of subsequent challenge by the regulator. Accordingly, it is essential that businesses implement a consistent policy throughout their operations and retain, for each reported case that does not ultimately result in a RIDDOR report being filed, all relevant documentation relied upon in making the decision not to report. Remember, in brief, the RIDDOR reporting of COVID-19 guidance suggests3 that when deciding if a report is required, a judgment call must be made as to whether or not there is reasonable evidence that a work-related exposure was the likely cause of the COVID-19 infection.

Another consideration is the possible impact such reports may have on a business’ civil liability legacy. In this regard, it must be remembered that by filing the RIDDOR the business is acknowledging that there is reasonable evidence to suggest the infection was likely caused at work, a fact that may greatly assist potential claimants with their causation arguments in any future compensation claims. In such circumstances, there will be greater focus on the suitability of the business’ risk assessments and control measures and, crucially, the extent to which they were enforced on a day to day basis. This means that businesses not only need to ensure their documentation is robust, up to date and regularly reviewed but also, due to the potential ‘long-tail’ nature of COVID-19 related claims, retained and appropriately archived for retrieval purposes. Indeed, as a result of increasing reports of ‘Long-COVID’ related conditions, it is entirely possible that businesses may ultimately need to be prepared to treat COVID-19 documentation in a similar way to other ‘long-tail’ disease conditions, such as those linked to asbestos exposure, and retain them for up to 40 years.

Finally, food and drink businesses may also need to give consideration as to how COVID-19 related information and documentation is dealt with in terms of other non-health and safety focused areas, such as corporate acquisitions and disposals or IT based system upgrades and modifications etc. As mentioned previously, when it comes to COVID-19 related claims, the availability of key evidence and documentation will be crucial to enable your insurers and lawyers to make appropriate liability decisions and so businesses should ensure that they are not inadvertently impacting their risk profile by ‘unknowingly’ failing to secure or disposing of key evidence.

For further information or guidance please contact your Willis Towers Watson representative or contact our Food & Drink Practice Leader, Sue Newton.

Footnotes

1 https://www.hse.gov.uk/statistics/overall/hssh1920.pdf

2 https://www.theguardian.com/environment/2020/sep/27/covid-cases-at-food-factories-in-uk-could-be-over-30-times-higher-than-reported

3 https://www.hse.gov.uk/coronavirus/riddor/index.htm

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Associate Director – Claims Defensibility and Regulatory

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Food and Drink Practice Leader

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