COVID-19 casualty-related litigation beginning to emerge: Praedicat

Praedicat, an insurtech risk modelling and analytics company for the casualty insurance and reinsurance space, has warned that its analysis shows that casualty-lines related litigation from the Covid-19 pandemic is now beginning to be seen.

One of the big unknowns related to the impacts of the global Covid-19 coronavirus outbreak is just how long the tail from the pandemic could prove to be for insurance and reinsurance markets.

While Covid-19 could actually be a relatively long-tailed industry loss event in the property insurance and reinsurance space, it is the casualty lines of business where the claims could keep on flowing and perhaps escalating over a prolonged period of time.

Praedicat has now announced some initial results from its newly-launched litigation tracker platform, through which it analyses and monitors U.S. court activity for casualty lines of business-relevant COVID-19 litigation complaint by complaint.

The company says it has so far tracked 217 complaints that have been filed in U.S. courts and allege a corporate defendant is responsible for introducing and spreading the Covid-19 virus.

The data is as of July 13th 2020 and out of the 217 complaints, some 55% allege personal injury or some threat of personal injury among cruise ship passengers and nursing home residents and employees.

Praedicat’s tracker enables users to identify the industries that appear most vulnerable to COVID-19 related litigation, identifying any significant clusters of complaints in hospitals, meat packing facilities, restaurants, and warehouses, etc.

It also captures any shareholder actions that allege corporate officers have breached their fiduciary duty during the pandemic.

The litigation tracker from Praedicat tracks and reports on casualty-relevant litigation from COVID-19 brought across all 50 states, the District of Columbia, and U.S. federal courts.

David Loughran, Head of Product and Chief Economist at Praedicat commented on the analysis, “Our litigation tracking service has provided the first picture of the scale of the emerging legal action related to the fast-changing pandemic. Already, we are seeing that nursing home complaints are accelerating while cruise line complaints are leveling off. The initial feedback we have had from clients is that the data has been extremely useful to help them manage their potential exposure to novel causes of action.”

As the impacts of the Covid-19 pandemic continue across the United States, this type of litigation is likely to continue to be seen and perhaps accelerate, especially as States attempt to increase activity levels and employers could therefore find themselves at-risk of complaints from staff that fall ill.

Over time, other areas of longer-tailed casualty line claims are likely to manifest as well and with the longer-term health effects of the coronavirus little understood, the pandemic has the potential to develop a significant casualty tail should any be identified.

As a reminder, you can track re/insurance company disclosures on Covid-19 losses and reserves here, which now amounts to almost $25bn.