Coronavirus: A Potential Claims Epidemic?
COVID-19 could bring a different threat to the holiday and insurance sector says David Scott, Partner at Horwich Farrelly.
History tells us that it will only be a matter of time before claims management companies and solicitors alike, jump on the Coronavirus bandwagon and start advertising for claims. Indeed, there are already a few firms of solicitors suggesting that people can be compensated if they become infected while abroad. But while it may be possible to successfully claim against a tour operator or hotelier for Coronavirus, we anticipate that it’s going to be incredibly tough. The reason being, even if the claimant is able to prove that they contracted the virus, they must also show that the travel company did something wrong and that this negligence caused or contributed to the illness or loss.
The burden of proof is on the claimant, not on the travel company to disprove it. So, one must ask whether the hotel knew, or should they have known, that guests had contracted the virus but did nothing to stop the spread to other guests. The same goes for cruise liners and airlines – did the ship stop in an infected port and fail to screen guests or did the airline fail to properly clean its aircraft when flying to regions that are known to be affected?
While the industry should be braced for the inevitable influx of claims, determining whether a claim is genuine or fraudulent will be key.
Proving that a travel company has been negligent is no easy task and even if the claimant gets over this second, significant hurdle, they must still then prove that this negligent act caused their illness. Did stopping at the infected port, or failing to have adequate hygiene systems in place make any difference? And the answers to all these questions, or rather the way they are tackled by the Courts, also differ depending on who you are bringing a claim against. For example, the rules for bringing an illness claim against a cruise liner differ to those used in a claim against a tour operator or hotel.
While the industry should be braced for the inevitable influx of claims, determining whether a claim is genuine or fraudulent will be key. Over the past few years, the travel industry has seen a 500% increase in gastric claims, but many claimants have since paid the price for making speculative claims under the premise that they had nothing to lose.
These prosecutions should serve as a stark warning to those that believe that bringing a dishonest claim is a minor offence, or is risk-free, as fraud will not be tolerated by the travel industry.