Coverage in a COVID-19 world
The batching of COVID-19 incidents and claims is a complex matter that requires expert analysis of: insurance structures, policy language and variant carrier stances.
What is ‘batch’ wording? Insurance policy language that defines how an insurer will treat multiple related claims.
The decision to seek recovery of COVID-19 healthcare professional liability / general liability (HPL/GL) costs is one that most clients will have to navigate; oftentimes before the magnitude of those costs if known and whilst simultaneously renewing their insurance program.
Because it influences:
To understand how batch coverage may apply the policy as a whole must be considered. However, there are several more prominent coverage elements that dictate the bulk of the batching mechanism:
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As there is no ‘standard’ batch language in the marketplace; batch clauses have great variation in both their terms, their application and their interpretation. Indeed, the same language can be interpreted and applied differently by separate insurers.
Batching terminology within the policy typically uses language like: related incidents or related claims (or both) and can be found in limits of liability conditions, definitions and/or endorsements.
The mechanism for batching claims (determining how incidents/claims are or can be related) is also highly variant. Insurers use different (and usually undefined) terminology, such as “logically related”, or “causally-related” or sometimes the ‘relatability’ mechanism is unspecified (potentially allowing for broader interpretations). This variance allows for a spectrum of interpretations about what types of incidents/ claims can be related:
Batch provisions can sometimes contain time elements like incident or claim reporting windows (time periods for noticing related incidents or claims) and language which specifies that one policy limit is available and which policy year is applicable.
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Overall, the spectrum of terms and variant interpretations can create great uncertainty around COVID-19 batch coverage outcomes.
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Any coverage analysis must also consider the knowledge exclusion (both current and prospective). The knowledge exclusion removes coverage for any incidents that are known about subject to some key considerations:
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Notice provisions may be especially critical for ‘in-flight’ scenarios (like COVID-19) where there are a slew of incidents but no (or few) claims; as may be the case for many clients. It is also important to review the notice provision to determine at what stage in the claim lifecycle notice is permitted: incidents, incidents reasonably likely to become a claim, or only those that are claims. Notice provisions also often specify a requirement for additional incident/claims details. Finally, some policies have specific batch notice requirements with nuanced elements: e.g. language that allows for permissive (client determined) notice.
Claim Reporting Guidance for healthcare clients With respect to COVID-19 exposures, it will frequently be beneficial to:
Appropriate elements to include in the notice will be based on the specific, applicable policy language, which may vary by layer.
Insurers have been pushing back on these reports, so every effort to provide enough detail to support a basis for a potential claim should be made. We have seen, for example, insurers ask for all reasonably obtainable information with respect to the time, place and circumstances of the event for which coverage is sought along with a brief statement why the insured believes a claim is likely to be made.
Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.
As Head of Healthcare Broking, NA, Kirsten drives the broking strategy for our healthcare industry clients, particularly for the signature lines of insurance that are critical to our healthcare clients in North America – professional, general and excess liability. Kirsten and her team of healthcare specialists in broking work with our Healthcare industry group, client advocates and producers to deliver cutting edge insurance programs grounded in analytics.