Do we have immunity from liability?

21 April 2021 Myra Knoesen

The COVID-19 vaccine rollout brings about a lot of uncertainty. Pharmaceutical shipments, such as vaccines, present a number of unique underwriting challenges, including high valuations, time and temperature sensitivities, careful packaging and handling requirements and high theft exposure.

With the above mentioned, iTOO hosted a two-part webinar where the risks and concerns were discussed.

In for disruption

In part one of the series, South African author, futurist and strategy consultant, and a founding director of strategic insights firm, TomorrowToday, Graeme Codrington discussed the concerns that people all around the world have about COVID-19 vaccines.

“From research and scenario planning some predicted a pandemic like this, but we all did not know when or how it would occur. This is not our first rodeo, because there have been many other diseases such as Severe Acute Respiratory Syndrome, also called SARS, the Spanish flu, also known as the 1918 influenza pandemic, and many others,” said Codrington.

“Viruses mutate and multiple variants develop. Others dangerous, others not so dangerous. Among coronavirus variants that are concerning are the British, South African and Brazilian variants. The South African variant is 70% more contagious,” added Codrington.

Having experienced our second wave peak, numbers have dropped. However, Codrington said a third wave is inevitable. “We are in for disruption pretty much for the rest of the year.”

Herd immunity

“In most countries, there is still a lockdown, mask wearing, and the vaccine is not 100% effective. There are no guarantees. In a few months’ time we will see the effects and population immunity. Some vaccines require multiple doses, given weeks or months apart,” he said.

The rollout of the AstraZeneca vaccine, which had been scheduled to begin in South Africa in February, was put on hold, until scientists decide on the way forward.

“A number of other pharmaceutical companies are set to deliver millions of vaccine shots in the next few weeks and months. So, vaccines are being rolled out. It is, however, going to take a long time to achieve a ‘no COVID-19 in communities’ situation. As mentioned before, some vaccines require multiple doses, given weeks or months apart… we will see the effects and population immunity in a few months,” he added.

Legal and insurance challenges

In the second part, liability experts focused on the insurance risks, including the underwriting challenges.

“Registration for the vaccine is taking place on an online platform known as the Electronic Vaccination Data System (EVDS), where a person’s ID number, address, employment details including geographical area is some of the information required. If you are eligible, you then receive a message that will tell you where to go. Once you have received your vaccination, an electronic vaccination certificate is issued,” said Fia Samuels, Product Champion: Medical Malpractice at iTOO.

“We are yet to see the consent form for the vaccination. We have noted countries such as Australia, the UK and the US have issued and provided consent forms to be completed prior to administering the vaccine,” added Samuels. 

“The vaccine will be administered through hospitals, clinics, outreach services and mobile clinics, and in private settings such as doctor’s offices, pharmacies, private clinics, and workplaces. Some of the possible scenarios which may have a third-party feel aggrieved in respect of administration of the vaccine include infection of the vaccination site due to poor hygiene, mild reactions which lead to fever, pain, bruising and redness at site, incorrect length of needle based on the weight of individual, allergic rection to latex etc., which may lead anaphylaxis and SIRVA - Shoulder Injury Related to Vaccine Administration,” continued Samuels. 

In terms of exposures in relation to public liability, Samuels said there is possibility for potential slip and trip claims caused by the higher footfall. “What can be done is a review and assessment of any potential risk, such as uneven floor and steps, adequate signage pointing out risks and setting out an obvious and clear indemnity or disclaimer. Manage social distancing and access, as well as availability of sanitizer and adhere to other COVID-19 requirements. Ensure emergency exits are clear and easily seen. Beef up cleaning processes and procedures. Other aspects to be concerned about that could cause a liability are issues like adequate security around the venue so that those at the site are protected, as well as any third-party property on the site, including the vaccines themselves, and to manage issues like crowd control. From an ITOO perspective, we could look at this purely as a premises risk, any claims relating to COVID-19 would be excluded. The Insured needs to advise their broker if their premises have been approved as designated vaccination site. The broker would in turn need to inform the underwriter, so that this can be noted on the policy and the underwriting impact assessed, and any additional terms and conditions can be applied.” 

Immunity from liability

Internationally governments have granted pharmaceutical companies’ immunity from liability as the vaccine is deemed to be critical. 

“In South Africa, the Dept of Health has entered agreements with Pfizer and the Serum Institute of India, in terms of which the Dept of Health has indemnified them against claims for damages resulting from the administration of the vaccine. I am not aware of a similar agreement being entered into with Johnson and Johnson, but I suspect that they have contracted on similar terms, especially taking into account the conditions under which the Johnson and Johnson vaccines was procured,” said Deon Francis, Partner at Clyde and Co. 

“However, it does not necessarily follow that the Dept of Health will enter into agreements with all pharmaceutical companies on this basis. The reason for this is that in order to enter into an agreement in terms of which an indemnity is granted, the Dept of Health has to comply with the Public Finance Management Act. Thus, in this instance, the Minister of Health as well as the Minister of Finance must authorise the terms of the agreement where such agreement contains an indemnity. Considerations that need to be taken into account include the estimated efficacy of the vaccine, the possible risk/liability to the Dept of Health; and the manufacturer itself. The difficulty in the present instance is that we're really not playing on a level playing field – we need the vaccine, and the pharmaceutical companies know it. The Health Minister, Zweli Mkhize, summed the position up quite accurately when he stated that “certain issues of liability are non-negotiable — it’s either you accept the conditions, or you don’t get a vaccine…”,” concluded Francis. 

Writer’s Thoughts

It is clear that there are a number of unique challenges with regards to the vaccine, but only time will tell. As Codrington said, we will see the effects and population immunity in a few months. When we look at the logistical side of things however, and the potential exposures mentioned above, do you believe we have immunity from liability? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts.


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