COVID’s Secondary Perils: What They Are and Why They Can’t Be Ignored
No doubt, as a seasoned risk professional, you hear the term “secondary peril” and immediately think of natural catastrophes and any subsequent risk they could bring.
For instance, tsunamis are often considered a secondary peril to an earthquake. Likewise, rain fall or flood events are secondary to hurricanes.
But have you considered the secondary perils of COVID-19?
“As primary insurers, we’ve been mostly focused on the here-and-now when it comes to the pandemic,” said Sheri Wilbanks, global casualty risk consulting manager at AXA XL. “While ‘the immediate’ was the right response, we are already hearing ways the impact will not be short-lived.”
At the onset of the virus, and even still today a year later, the focus for insurers has been on business interruption, workers’ compensation implications, canceled events and public liability. But that won’t be the full COVID picture in a year, five years, ten years or longer.
“Now is the time to look at what the subsequent, secondary effects may be,” Wilbanks said.
The Secondary Perils of COVID to Watch
For Wilbanks, three of the main secondary perils of COVID-19 include: long-term health effects, productivity and innovation and take-home-COVID.
There have been countless reports and data compilations already published on the seemingly long-lasting health effects of the COVID virus, from a loss of taste and smell all the way to respiratory troubles. People who never smoked a day in their life are experiencing symptoms similar to smoker’s lung thanks to contracting the virus.
“The long-term health effects will have both insurable and uninsurable elements,” said Wilbanks.
“Insurable in the context of medical expenses in the employee benefits area, and in some cases under workers’ compensation cover. There will likely be some long-term effects covered under one of both of these programs.”
But as for the uninsurable, Wilbanks said that the lasting mental health impacts caused by the virus could go undiagnosed, untreated or without coverage under an insurance program. This is particular to health care workers, themselves, who have had first-hand experience in dealing with the fallout of the virus. PTSD is already being seen in these workers, as well as COVID patients who have recovered yet still have lasting anxiety.
On the production and innovation side of things, Wilbanks pointed to several upheavals in the way we’ve conducted business this last year.
“COVID brought on a new work arrangement for a lot of us,” she said. “While that’s brought some positive changes for many, the benefits are not universal.”
“We’ve heard of the named ‘she-cession,‘ the mass exodus of women from the workforces. COVID changed life for many families, and women tended to be the ones to cut back on work to take care of the kids at home or had the lower paying jobs in the industries most hit by closures,” she said.
This can lead to further long-term adverse effect on the industry — with less women in the field and diversity and inclusion efforts on the rise, how can companies possibly look to promote women into senior or middle management when those workers are no longer available for such positions?
“Organizations are losing this particular pool of talent right now. And it might take a long time to recover.”
As for “take-home-COVID,” Wilbanks said to think of it like “take-home-asbestos, where a worker brings the disease home from the workplace and transfers it to a family member or friend. It’s a direct cause of the relationship that employee has to the workplace. Liability now exists between the family member and the employer.”
Where Savvy Risk Managers Can Go to Learn More
Wilbanks is presenting at this year’s RIMS Live 2021 virtual event on this very topic.
She’s looking to do several things through her discussion, not just in educating risk professionals on the various secondary perils that could persist following COVID but also in highlighting the bigger picture secondary perils play overall, from COVID to natural catastrophe.
“Secondary perils can no longer be viewed as secondary,” she said. “We need to give these more attention.”
Her session, “Secondary Perils of COVID-19: Are Current Known Losses Just the Tip of the Iceberg?” will be available for viewing on the RIMS Live 2021 website on April 19 as part of the annual conference’s virtual event. She will dive in deeper on each of the secondary perils discussed above.
Those interested in attending can register here. &