Insurance Coverage

6/22/20 – Lockdown caused losses, not COVID-19: Insurers.

Business Maverick magazine reports that South Africa’s financial regulator does not see the lockdown as a trigger for business interruption claims, but it does provide some good news for the beleaguered hospitality industry.  The Financial Sector Conduct Authority, which regulates South Africa’s financial institutions from banks to insurers, has weighed in on the subject of business interruption insurance, bringing a ray of hope to the many restaurants, hotels and lodges facing economic ruin as a result of the Covid-19 pandemic and subsequent lockdown.

The hospitality sector had turned to the regulator in the hope that it would be able to intervene in what was turning into a battle royale between insurance companies and their clients, those businesses that had taken out business interruption insurance and believe they have a legitimate right to claim.

In short, business interruption insurance exists to help companies survive following an unanticipated event. There are generally two types of BI insurance: a basic policy which requires physical damage to the business premises in order to trigger a claim, and a tourism/hospitality policy that contains a specific extension that includes interruption by infectious or contagious notifiable disease.


6/22/20 – Navigating through proof of loss requirements during the COVID-19 pandemic.

NJ Property Casualty 360 reports that as businesses begin to reopen, companies face the difficult task of getting their operations back to normal. For some, this includes navigating the claims process for their business interruption insurance claim relating to COVID-19.

Having a basic understanding of specific post-loss obligations set forth in most commercial property insurance policies can expedite the claims process. One example is the proof of loss requirement, which can arise early in the claims process. Businesses may have a variety of questions about the proof of loss necessary to recover under an insurance policy.   The article discusses proof of loss including issues with timing and impacts for untimely notice.


6/19/20 – Re/insurers face “profound” impact as COVID-19 lifts pricing: AmWINS.

Reinsurance News reports on the affects of COVID-19 on the re/insurance industry, analysts at specialty insurer AmWINS have warned that “the loss impact on the market will be profound.”

In May, Lloyd’s of London reported that it will pay between $3 billion and $4.3 billion as a result of the pandemic, which is equal to the cost of 9/11, or the combined impact of hurricanes Harvey, Irma and Maria. The estimated amount the re/insurance industry as whole will pay in covered claims varies widely, with projections ranging from $40 billion to $100 billion, but losses could rise further if the current lockdown continues into another quarter. According to the results of the latest survey by Reinsurance News, the majority of market participants predict the ultimate non-life underwriting loss will be less than $100 billion, although 20% said it could be up to $150 billion, and 14% anticipate it will be over $200 billion.

In addition to these impending losses, the state of the global economy, possible resurgence of COVID-19 in the fall and winter, property damage from riots, and predictions of a higher than average hurricane season will continue to impact market conditions. These conditions have prompted a significant shift in reinsurance treaty renewals, with average increases of more than 25% at the June 1 renewals.


6/19/20 – Insurer hit with COVID-19 suits says virus doesn’t damage property.

Business Insurance magazine reports that the coronavirus does not cause damage to tangible property, therefore, income lost due to COVID-19 lockdowns is not covered by commercial insurance policies, an insurer facing multiple claims from restaurants and other businesses argued Monday.

Separately, another coronavirus business interruption suit was withdrawn on Monday.

In the case Rising Dough Inc., et al. v. Society Insurance, which was filed in April in U.S. District Court for the Eastern District of Wisconsin, the insurer filed a motion to dismiss, arguing that it is not obliged to provide coverage for coronavirus-related losses.


6/11/20 – COVID-19 may complicate civil unrest interruption claims.

Business Insurance magazine reports that while commercial property insurance policies generally provide coverage for physical damage and business interruption losses arising from civil unrest, COVID-19 losses will complicate the claims process for some businesses, legal experts say. As curfew orders are lifted, policyholders should also be aware of waiting periods, time limits and other policy details that may affect their ability to get claims paid, they say.

Largely peaceful protests continue amid growing calls for police reform following the May 25 death in police custody of George Floyd in Minneapolis. A funeral service for Mr. Floyd was held in Houston Tuesday. Possible hurdles to insurance coverage that some policyholders may face were underscored in an Illinois Department of Insurance bulletin issued to insurers Monday.

The bulletin asked insurers to “err on the side of the policyholder when paying claims as a result of riots, civil commotion, or vandalism” from businesses that have been unable to pay their premiums in full since an executive order from Illinois Gov. J.B. Pritzker took effect March 20. The order required all Illinois residents to stay at home and nonessential businesses to cease.

To the extent business interruption provisions are included under a policy, insurers should also base payouts on business activity levels that “eliminate the impact of COVID-19,” the Illinois Department of Insurance said.


6/10/20 – Businesses Opening Despite Shutdown Could Face Questions Over Coverage.

Insurance Journal reports that Insurers are already seeing some pushback regarding virus-related claim denials from businesses that suffered losses while closed due to the pandemic, but what about claims a business could file if it opens despite a pandemic shutdown order?

Pennsylvania Governor Tom Wolf issued a warning last month to businesses that choose to open despite the pandemic shutdown, saying they could be jeopardizing their insurance coverage, The Associated Press reported.

Following Wolf’s warning, Pennsylvania Insurance Commissioner Jessica Altman reminded businesses of risks and increased liability they could face if they don’t comply with the shutdown order.

“Businesses and residents rely on insurance coverage to protect them from liability, pay for covered losses, and compensate those who may be injured or harmed,” Altman said in a press release issued by the Pennsylvania Insurance Department. “It is the duty of every business and resident in Pennsylvania to ensure that they and the public at large are provided with the maximum level of protection afforded by insurance. Any actions that could potentially create coverage gaps are the antitheses of the civil duty required of all residents during these times of emergency.”


6/10/20 – S&P Pegs Coronavirus Losses at $15-$30B. Chief Risk Officers Think That’s Low.

Insurance Journal reports that Analysts for Standard & Poor’s Global Ratings shared a view that U.S. underwriting losses from COVID-19 would fall in the $15-$30 billion range. However, risk officers speaking at a rating agency conference last week said the estimate is light.

S&P Director Stephen Guijarro revealed the rating agency’s projection, which is based on its research and information gathered from S&P’s rating universe, during an introductory session of the S&P’s Annual Insurance on Thursday, taking place virtually this year for the first time. Guijarro said the estimate is limited to the U.S.-only. It also assumes virus exclusions in commercial property policies with business interruption coverage will hold and that legislative efforts to ignore them will fail, Guijarro said.

“The storm has made landfall but it hasn’t finished,” Ringsted said, noting that it’s part medical catastrophe and part economic catastrophe, with the latter set to play over 12-18 more months. Greg Richardson, chief risk and strategy officer for TransRe, puts underwriting losses at a number “a little worse than S&P,” but agrees with the S&P conclusion that they will be manageable.


6/10/20 – Most COVID-19 comp claims in health care, first responders.

Business Insurance magazine discussed how health care workers and those working in protective services accounted for 83.3% of COVID-19 indemnity workers compensation claims filed in Florida as of May 31, according to a report issued Tuesday by the Florida Department of Financial Services, Division of Workers’ Compensation.

The report tallied 3,807 time-off, virus-related claims filed since the start of the pandemic, totaling $3.2 million in benefits paid. It found that that 45.7% of claims came from health care workers and 37.6% from the protective services sector, which includes first responders.,-first-responders


6/9/20 – Ironshore offers COVID liability endorsement for contractors.

Ironshore Environmental is offering a COVID-19 environmental legal liability policy endorsement for certain contractor classes that has up to $5 million in limits, the Liberty Mutual Insurance Group Co. unit said Monday.  Ironshore said in a statement its CELL coverage responds to third-party bodily injury, property damage and remediation of environmental damages resulting from pollution incidents caused by a contractor’s work at a job site. It said the COVID-19 coverage is specifically designed for experienced environmental and disinfection contractors, and is being offered on a claims-made, practice or project-specific basis. The coverage is available with a minimum $25,000 premium and a minimum $50,000 deductible.


6/3/20 – In-N-Out sues its business interruption insurance provider.

Restaurant Business magazine reports that the burger chain has sued Zurich American Insurance Company for breach of contract in denying its claim.  In-N-Out Burger added its substantial voice to the chorus of restaurant owners who say insurance companies are improperly denying their business interruption insurance claims. The Irvine, Calif.-based burger chain last week sued its insurance company, Zurich American Insurance Co., for breach of contract after the insurer officially denied its business interruption insurance claim. In its complaint, filed in a federal court in California, In-N-Out says it has an “all-risk” coverage plan with Zurich that covers common risks such as fire but also “novel risks that may arise which were not previously considered by the company, Zurich or by the public-at-large.” The complaint says the policy “contains no exclusion for viruses or infectious diseases.”

In-N-Out has a policy with Zurich with a $250 million limit, and in its complaint says that it notified Zurich of its coronavirus loss in April. The burger chain said the insurer’s investigation was “limited to a short email containing a handful of questions regarding COVID-19 diagnoses and the amount of loss.”  Within a week, a senior Zurich employee told In-N-Out that he believed the insurer would not cover the loss, according to the complaint, which also quotes Zurich CFO George Quinn noting in May that 99% of its plans do not cover virus outbreaks. Zurich officially denied its claim on Friday. In-N-Out filed its lawsuit that same day.


6/3/20 – Rioting Plus COVID-19 Equals Complex Business Interruption Claims.

Risk & Insurance magazine issued an article discussing the impact of the riots occurring across the country and how it will likely impact claims.  The article discusses how businesses will make claims for property damage and stolen merchandise. But perhaps the most complex claims could come from business interruption.   Businesses were already reeling from closures and slowdowns due to the COVID-19 pandemic. Many thought business interruption insurance would help them through that crisis but most claims were denied due to pandemic exclusions and the lack of physical property damage.

Damage from riots is different — and typically would trigger business interruption coverage. Still, calculating losses is complicated by COVID-19. Some businesses are closed, others have abbreviated services like curbside pickup and online ordering, and others are open.  Insurers will likely argue that if businesses weren’t planning to be open due to the pandemic, they’re not entitled to coverage. Business owners would counter that the vandalism losses are separate from COVID-19 losses.

Another COVID-19 complexity is evolving government guidance on reopening.  In Philadelphia, for example, officials planned to reduce restrictions on June 5 — allowing retail businesses to let customers inside, but limiting them to five shoppers per 1,000 feet of retail space. An insurer valuing the loss would have to take those changing factors into account.    Expect property damage to linger longer than normal — making business interruption timeframes grow. Getting insurance adjusters, supplies, and repair professionals to locations was already challenging due to COVID-19 slowdowns. Curfews and road closures from the riots will make it that even harder.

Another sticking point will be the classification of the incidents. If it’s classified as simple vandalism, it’s likely to be covered, according to Hans. If it’s classified as political unrest, it could be excluded.


6/3/20 – Rulings on COVID-19 Closure Orders May Impact Business Interruption Claims.

Claims Journal reports that business closure and stay-at-home orders have faced legal challenges based on putative Constitutional claims across several states. Several decisions have now been issued that construe the legal authority of state government to required closure of businesses and/or compel prospective customers to remain in their homes. Even where injunctive relief has been granted, these courts have recognized that non-essential businesses can be required to cease or reorganize their operation not because they have sustained physical damage but because their business invitees may expose other invitees and employees to contagion. These decisions could have significant and unanticipated implications for business interruption coverage claims.

District Courts in California, New Mexico, and most recently, Pennsylvania, have denied requests for injunctive relief by individuals and groups who have argued that closure and similar orders infringed rights protected under the First, Second, and Fourteenth Amendments to the U.S. Constitution.


6/1/20 – Class Action Filed Against Farmers Insurance Over Same-Day Business Interruption Claim Denial.

Market Insider reports that a retailer sued Farmers Insurance in Los Angeles Superior Court for denying a business interruption claim on the very same day the claim was made.

The Great Frame Up is a national chain of framing stores with 100 locations throughout the United States. A franchisee of the Great Frame Up located in in Northridge, California brought a class action lawsuit against Farmers Insurance after its business interruption claim was denied over the phone the very same day the claim was made.

The class action alleges Farmers Insurance is employing a strategy to summarily deny any claim for loss of business income made by small business in the hopes that they will not pursue litigation. The suit alleges Farmers employed the same tactic after the 1994 Northridge earthquake.


5/27/20 – Covid-19 Business Losses Covered By Insurance: Lawyers And CPAs Advise You To File Claim Now.

Forbes reports that contrary to what you may think, your company’s insurance policy may cover pandemic-related losses. Most commercial property insurance policies include what’s broadly referred to as “business interruption coverage.”

Lack Of Specific Policy Coverage For Viruses Does Not Matter: Most companies do not have this type of explicit insurance coverage for pandemics, but that doesn’t necessarily rule out a claim. For example, Reuters reports a Paris commercial court recently decided that the major French insurance firm Axa must pay two months’ worth of coronavirus-related revenue losses to a restaurant. The ruling will be appealed to a higher court. The case is being closely followed by restaurants, nightclubs, and similar businesses in the US and the UK.

The article lists 12 key things to know about your policy and lists 9 steps that you can take now to proactively address your concerns over business interruption coverage.  A link to the article can be found below.


5/27/20 – Court opinion finds COVID-19 qualifies as a natural disaster.

Property Casualty 360 reports that The Pennsylvania Supreme Court recently issued an opinion that provides helpful language that policyholders and their counsel will likely cite in support of arguments for insurance covering business interruption losses related to the COVID-19 pandemic.

In Friends of DeVito, et al. v. Tom Wolf, Governor, et al., Pennsylvania business owners brought an emergency petition for relief against the governor’s executive order closing nonessential businesses to slow the spread of COVID-19. The petitioners generally argued the governor exceeded his statutory authority in issuing the executive order.

The Court found “the governor is vested with broad emergency management powers under the Emergency Code.” Indeed, the governor is “responsible for meeting the dangers to this Commonwealth and people presented by disasters,” and the governor may, by proclamation or executive order, declare a state of emergency. Upon the declaration of a disaster emergency, the governor has “expansive emergency management powers,” which include controlling the ingress and egress to and from a disaster area. The petitioners raised several challenges to the application of these powers in response to a viral illness such as COVID-19.


5/26/20 – Pandemic prompts call for EU backup.

Business Insurance magazine reports that a European Union framework is needed to provide insurance cover for catastrophes such as pandemics and huge cyberattacks, the Federation of European Risk Management said on Tuesday.

This would involve public-private partnerships and could cover events that hit businesses but do not involve physical damage, FERMA said in a letter to the European Commission.

Insurers say most businesses are not covered for pandemics, which has left small businesses in Europe battling for payouts for lost revenue due to the coronavirus crisis.


5/26/20 – AXA Decides to Pay Business Interruption Claims to Restaurants After Court Ruling.

The Insurance Journal reports that AXA said it would meet the bulk of business interruption claims from some restaurant owners in France after it lost a court case that was seen as a potential precedent for coronavirus-related disputes across the world. A Paris court ruled last week that AXA should pay a restaurant owner two months’ worth of revenue losses caused by the virus pandemic. AXA had argued its policy did not cover business disruption caused by the health crisis.

AXA has said it will appeal the Paris ruling, but Chief Executive Thomas Buberl said on Tuesday the company was seeking an amicable solution and planned to meet the bulk of claims from restaurant owners whose contracts had some ambiguity in them.  Some other French insurers have said they will pay out business interruption losses to some customers, depending on specific contracts. Generali France, for example, has said it will make payments to 600 hospitality businesses.


5/26/20 – Restaurants are suing insurance companies over unpaid claims — and both sides say their survival is at stake.

The Washington Post reports that this month, the proprietors of more than 10 restaurants, bars and bakeries in Washington, including the Michelin-starred Gravitas and Pineapple and Pearls, sued their shared insurance company, joining a growing list of restaurateurs who are seeking relief from an industry they thought would protect them from any unpredictable event, including a pandemic of historic proportions.

The owners are pressing carriers to honor business-interruption policies during an outbreak that has wreaked so much financial havoc that it could bankrupt insurance companies and put at risk claims not related to covid-19. One side has few cash reserves and a trickle of revenue from takeout and delivery. The other side has an $800 billion surplus that, despite its size, could vanish in a matter of months, insurers say, if they start paying out these claims.

Both industries say they’re fighting for survival.


5/22/20 – Insurers face off with Congress over pandemic coverage.

Politico reports that Insurers unveiled a proposal on Thursday that calls for the federal government to compensate businesses hurt by future viral outbreaks, the latest attempt by the industry to fend off pressure from lawmakers to offer coverage for pandemics.

The plan is a counterproposal to legislation that Rep. Carolyn Maloney (D-N.Y.) will introduce this week that would encourage insurers to sell pandemic coverage in business interruption insurance policies by creating a federal backstop that would help pay for losses. Today, insurers often exclude viruses in the business policies, and the industry is facing a wave of litigation after rejecting claims from employers forced to shut down since March.


5/21/20 – NJ Law Favors Insureds In COVID-19 Biz Interruption Suits.

Law 360 issued an article discussing how NJ law favors insureds in business interruption suits. The article details that for purposes of exclusions in property policies, New Jersey has adopted the efficient proximate cause doctrine. This doctrine states that the cause of a loss is either the first precipitating event or the final damage-inducing act.

Applying this doctrine, policyholders have argued that while the precipitating cause of their loss may have been the coronavirus, the final act causing loss was the governmental order that closed down their businesses. Since the government order is the efficient proximate cause of the loss, the virus exclusion should not apply.


5/19/20 – California Expands Order for Insurers to Partially Refund Premiums.

The Insurance Journal reports that on May 15, 2020, California Insurance Commissioner Ricardo Lara today issued a bulletin extending his previous order requiring insurance companies to return partial insurance premiums to consumers and businesses amid the ongoing COVID-19 pandemic.

The bulletin now includes the month of May, having already included the months of March and April, covering at least six different insurance lines: private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability, medical malpractice, and any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.

The bulletin requires insurance companies to provide an adjustment to the premium in the form of a premium credit, reduction, return of premium, or other appropriate adjustment as soon as possible, and no later than Aug. 11.

For most if not all consumers, this will be a percentage of the premium and the CDI plans to validate each insurance company’s plan.


5/18/20 – Lloyd’s Expects US$4.3B in COVID-19 Claims – On Par with Costs of 9/11 Terror Attacks.

The Insurance Journal reports that Lloyd’s of London revealed it will pay claims in the range of $3 billion to $4.3 billion as a result of the COVID-19 pandemic.

This payout is on a par with the Sept. 11 terrorist attacks, which cost the Lloyd’s market $4.7 billion, and the combined impact of hurricanes Harvey, Irma and Maria in 2017, which had price tag for Lloyd’s of $4.8 billion.


5/18/20 – Lloyd’s: COVID Business Interruption Claims Require Physical Loss.

Insurance News Net reports that a London insurer gave hints of how the industry will fight a series of lawsuits in one of the first responses to business interruption insurance claims related to COVID-19.

Certain Underwriters at Lloyd’s London is the defendant in a Florida lawsuit brought by Prime Time Sports Grill, a Tampa restaurant. Similar to defendants in many other lawsuits across the country, Lloyd’s London denied Prime Time’s business interruption insurance claim.

The Lloyd’s underwriter argues that the policyholder failed to allege facts showing direct physical loss to the insured property to trigger coverage. It points out that the policyholder’s allegation that the Florida governor ordered the restaurant to close for 30 days, even if true, does not meet the direct physical loss requirement.


5/18/20 – Pennsylvania bill would define COVID-19 as property damage.

Property Casualty 360 reports that the Pennsylvania Senate is weighing a bill that would include losses spurred by the COVID-19 global pandemic under property and business interruption insurance coverage.

Although SB. 1127, which was introduced on April 30, does not explicitly state that insurers must cover COVID-19 business interruption claims, it would require insurers to pay claims that standard property policies do not typically cover. Specifically, the bill states that if a covered property is located within a municipality where “the presence of the COVID-19 coronavirus has otherwise been detected,” that property is “deemed to have experienced property damage.”

Coronavirus is deemed to be “detected” when at least one or more persons present in that municipality has been positively identified as having been infected by COVID-19.  The bill also states that Gov. Tom Wolf’s March 19 emergency order to close businesses is to be considered an order of civil authority under a first-party insurance policy which limits, prohibits, or restricts access to non-life-sustaining business locations “as a direct result of physical damage at or in the immediate vicinity of those locations.”

The bill would apply to all insurance policies that were active as of March 6, and would potentially constitute an interpretation of several key policy terms including “direct physical loss, damage, or injury to tangible property,” a term that has been the core of the majority of COVID-19 insurance complaints that have been filed thus far.


5/18/20 – Language in Emergency Orders Gives Ammo to Plaintiffs in Business-Interruption Suits.

The Claims Journal reports that cities and counties across the country may have handed plaintiff’s attorneys an argument to use in lawsuits against insurers that seek business-interruption coverage for losses caused by coronavirus closure orders.  Jurisdictions as far asunder as Los Angeles, Calif. and Key West, Florida include verbiage about “property loss” or “damage” in emergency directives that explain the reasons that businesses are being ordered to shutter. Those orders, in turn, are being cited in lawsuits that seek to persuade the court that coronavirus has caused property damage, which triggers business-interruption coverage.

Defense attorneys widely dispute the notion that a virus can be construed as physical damage to property that merits coverage, even in policies that don’t specifically exclude coverage. Many plaintiff’s attorneys say otherwise and are itching for a courtroom showdown.


5/18/20 – Zurich Insurance Estimates Coronavirus Pandemic Claims to Hit $750 Million for 2020.

The Insurance Journal reports that Zurich Insurance estimates that the overall property and casualty (P&C) claims from the COVID-19 pandemic will be in the region of $750 million for 2020. To put that into context, Zurich’s CFO George Quinn said the expected COVID-19 claim level is similar to the impact of claims the company saw in 2017 from the Hurricanes Harvey, Irma and Maria, although the current estimate is subject to significant uncertainty.


5/13/20 – Insurers don’t need to pay coronavirus business interruption claims: Treasury.

Fox Business News reports that The Treasury Department does not appear to share the belief that insurance companies should pay business interruption claims for coronavirus-related shutdowns.

In a letter sent to Capitol Hill on Monday, the Treasury Department said that it is concerned proposals to require insurance companies to pay up “fundamentally conflict with the contractual nature of insurance obligations,” regarding legislative measures, for example, that would require companies to retroactively change their terms of agreements.  The agency believes insurers should pay “valid claims,” and officials plan to work with Congress and appropriate stakeholders to find a solution.


5/12/20 – Hotel group, day care center sue for COVID-19 cover.

Business Insurance magazine reports that the range of businesses taking insurers to court for coronavirus-related losses continued to expand last week with a New Orleans-based hotel group and a day care center in New York suing their insurers.

In Nola Group Hotel LLC v. Starr Surplus Lines Insurance Co., the policyholder, which runs six hotels in New Orleans, outlines in a suit filed May 4 in federal court in New Orleans how government-imposed restrictions intended to limit the spread of COVID-19 have hit businesses in Louisiana. Nola contends that it has suffered direct physical damage and that it has an all-risk policy that “provides coverage for all risks unless the risk is specifically and clearly excluded or limited in the Policy.”

In Slate Hill Daycare Center Inc. v Utica National Insurance Group, a Slate Hill, New York-based children’s day care center says in a suit filed in federal court in New York on May 7 that since a statewide lockdown was imposed in March, it can only operate to take care of children of essential workers. The center’s policy does not contain a virus exclusion, COVID-19 has caused physical damage, and coverage for its lost income is triggered under the civil authority section of its policy, the lawsuit states.,-day-care-center-sue-for-COVID-19-cover


5/6/20 – Lloyd’s syndicate slams ‘direct physical loss’ claim in COVID suit.

Business Insurance magazine issued an article discussing how a Lloyd’s of London syndicate fired back at a Tampa, Florida, sports bar that sued the insurer last month for business interruption coverage, arguing the bar is not covered for coronavirus-related losses.

In a motion to dismiss filed in federal court in Tampa on Monday, syndicate DTW 1991, which is managed by Coverys Managing Agency Ltd. in London, contends that coverage under its policy is not triggered because the bar did not suffer a physical loss or damage.  DTW argues that its policy only offers coverage for lost income if it is caused by “direct physical loss of or damage to property.”

Insurers cannot cover businesses for “every economic ‘slowdown’ attributable to an outside cause,” court papers say.


5/5/20 – Legal Sea Foods Is Suing Its Insurer for Denying Its Coronavirus Claim.

Eater magazine reports that Boston-based seafood restaurant chain Legal Sea Foods is suing its insurer, Strathmore Insurance Co., for rejecting a claim it filed for damages resulting from the COVID-19 pandemic. The seafood chain claims that its “all risks” policy should cover losses incurred by dine-in shutdowns in Massachusetts and the other states in which it operates. The lawsuit was filed in federal court in Boston on May 4.

According to reporting from The Boston Globe, the lawsuit states that Legal Sea Foods’ insurance policy doesn’t contain a pandemic exclusion. Pandemic exclusions became de rigueur for most major insurance companies in the wake of the SARS epidemic of 2003.


5/5/2020 – AIG expects wide industry COVID losses; cuts insurtech unit.

Business Insurance magazine issued an article discussing how American International Group Inc. estimates it will pay $272 million in first-quarter losses related to COVID-19 and expects the pandemic will generate the largest ever industry loss, hitting numerous lines of business.

The insurer also announced it has placed its less than three-years-old insurtech unit Blackboard U.S. Holdings Inc. in runoff and took a $210 million charge related to the decision.   AIG CEO Brian Duperreault said: “We believe COVID-19 will be the single largest cat loss the industry has ever seen, and it will continue to have significant global economic ramifications for the foreseeable future.”


4/30/20 – Longer Claims, Falling Premiums: NCCI Details How COVID-19 Could Affect Workers’ Comp.

Risk & Insurance magazine issued an article discussing the impacts of Covid-19 on Worker’s Compensation.  It discussed how the economic effects of COVID-19 are easy to spot in industries such as hospitality and retail, in workers’ compensation, it may be more difficult to tell how the novel coronavirus is affecting payers’ wallets.  NCCI suspects that temporary business closures are less likely to have the same economic impact as the Great Recession, which was fueled by sustained job loss. But they could still result in workers’ compensation premiums dropping.

4/22/20 – Litigation over business interruption insurance heats up.

Insurance Business magazine issued an article detailing how litigation is beginning to take shape for business interruption coverage.  In a recent development, two motions were filed on April 20 with the Judicial Panel on Multidistrict Litigation (JPML) that asked the panel to consolidate federal suits accusing insurers of dodging claims by businesses that were shut down by government orders, according to Reuters.

The first of these motions involves Levin Sedran & Berman and Golomb & Honik, and argues that the question of whether business interruption insurance policies will cover losses incurred by these businesses can’t be answered in piecemeal by different courts around the US because of its significant national importance. The second bid, which was filed by DiCello Levitt Gutzler, the Lanier Law Firm, Burns Bowen Bair and Daniels & Tredennick, underscored the efficiency of centralized expert epidemiology discovery and legal analysis.

The key issues across the complaints filed against insurers so far are whether COVID-19 causes physical damage or property loss, and whether insurance coverage is triggered when the virus is present on or near a policyholder’s property, as argued in the brief.

4/16/20 – Covid-19 stirs up an already murky outlook for D&O coverage.

On April 16, 2020, Risk & Insurance magazine issued an article discussing challenges within the D&O insurance market. It details how the market was hardening in January 2020 and now it is anticipated that Covid-19 will create issues with capacity as insurers may be pulling out of markets. Major industry brokers have weighed in and all appear to anticipate challenges on renewals.


4/10/20 – President Trump comments on insurance coverage.

On April 10, 2020, the Claims Journal reported that President Trump has come to the defense of business owners. At a recent press conference, President Trump spoke out in defense of businesses that have been denied business-interruption coverage when the policy does not exclude viruses and pandemics. In his view, if the policy makes no mention of a pandemic, then it should provide coverage.


4/9/20 – First Responders want Covid-19 to be covered under Worker’s Compensation.

Risk & Insurance Magazine reports that whatever PPE supplies states are able to obtain go to hospitals where physicians are battling COVID-19 on the frontlines, leaving police officers, firefighters and some EMTs vulnerable to coronavirus, because many of them have to interact with sick patients as part of their jobs.  As the chance of exposure to COVID-19 increases for first responders, some are calling for states to pass legislation that would remove the requirement that employees prove their exposure was work-related in order to receive workers’ compensation benefits for first responders.   The question of whether or not COVID-19 is an occupational disease is a tricky one. In most cases, communicable diseases aren’t covered under workers’ compensation, unless illness arose out of a person’s employment.

In an open letter to America’s governors, the Fraternal Order of Police, the nation’s largest police officer union, called for officials to assume that officers who become sick are contracting COVID-19 on the job, making them eligible for workers’ compensation.    “We have asked the U.S. Department of Labor to establish a presumption for law enforcement officers who contract COVID-19 as an occupational illness and be covered under workers’ compensation.”


4/9/20 – Coronavirus is a Direct Physical Loss Triggering Event.

On April 9, 2020, Law 360 issued an article discussing how coronavirus may be a physical loss triggering event as a counter-piece it its prior article issued on April 6, 2019, arguing the opposite. This article details how case law can be used to support a business interruption and other claim against a commercial policy. The outcomes are yet to be determined, but it will likely depend on an application of specific policy language to each State’s caselaw in order to gauge a probability of success on the arguments for coverage.


4/9/20 – Anticipated Coronavirus Claim Scenarios.

On April 9, 2020, the Insurance Journal issued an article discussing a myriad of potential claim scenarios that may arise under various coverage lines.



4/7/20 – Virus exclusions mirror prior issues with pollution exclusions.

Property Casualty 360 issued an article discussing challenges that may be made to the insurance industry’s unified call to enforce a “virus exclusion” within certain policies. It discusses how in the past, arguments were made against carriers’ decisions to enforce pollution exclusions due to misrepresentations made to State insurance regulators on the applicability of exclusions with the policies. It is asserted that the same arguments of misrepresentation may be applicable here regarding the virus exclusions.


4/6/20 – Coronavirus ‘Civil Authority’ Coverage May Hinge On Science.

In an article published by Law 360 on March 18, 2020, it is discussed how a flurry of lawsuit is expected on Civil Authority coverage. Per the article, Oceana Grill, which is in New Orleans’ French Quarter, argued in a suit filed that that the civil authority prong of its “all risk” property policy with underwriters at Lloyd’s of London should cover its lost revenue following statewide orders that sharply curtailed the size of public gatherings and required restaurants to cease on-site dining. Like many civil authority provisions, the one in Oceana Grill’s policy requires that a government restriction stem from a “direct physical loss” — or damage — to a nearby property for coverage to apply.

The article continues and discusses how even if companies’ policies don’t exclude coverage for viruses they may still face a tough task in fulfilling the direct physical loss requirement, given the unsettled and still-evolving science around the coronavirus. There is not yet a consensus in the scientific community regarding how long the novel coronavirus can survive on surfaces or materials. Therefore, policyholders and insurers embroiled in civil authority coverage disputes are likely to turn to scientific experts to ascertain whether, and for how long, the coronavirus contaminated buildings affected by government-mandated closures.


4/3/20 – No business interruption virus cover, insurers tell California lawmakers.

Business Insurance magazine issued an article discussing concerns raised by insurers to California’s legislature regarding the availability of insurance to cover business interruption claims. Insurers have expressed concerns over solvency and an ability to pay on claims that were intended to be covered under policies and priced accordingly using actuarial data. Recent estimates show that business continuity losses just for small business of 100 employees or fewer could reach up to $383 billion per month, while the total surplus of the U.S. property/casualty insurance industry is only $800 billion, the five insurer trade groups said in the letter.


4/3/20 – Marsh Issues a Report Detailing Covid-19: Evolving Insurance and Risk Management Implications.

Marsh has issued a detailed report discussing insurance coverage and claims considerations in light of Covid-19. The report details business continuity and resilience considerations as well. The 14-page report provides a great overview of various potential impacts to the legal and insurance communities. A link to the report can be found below.

COVID-19:Evolving Insurance and Risk Management Implications 


4/2/20 – Insurers Worry About D&O Claims Against Executives from Coronavirus.

The Insurance Journal issued an article on April 2, 2020, discussing how insurers are concerned over suits against Directors & Officers impacting coverage. Suits have been filed in the United States in recent weeks accusing companies of making misleading statements about the coronavirus or their coronavirus plans in order to sell products and boost their share price, while cruise operators, for example, are bracing for claims from passengers stuck on ships hit by the virus.


3/25/20 – Insurance Journal reports that AM Best projects potentially large losses on Event Cancellation coverages.

An article that appeared in the Insurance Journal on March 25, 2020, discussed the potential for a ripple effect through various carriers that write Event Cancellation coverages. Although Event Cancellation coverage is a relatively small line of business for carriers, however, the cancellation of large events – such as the 2020 Summer Olympics in Tokyo – could result in significant losses. Further, it is states that “losses on this line of business could have a compounding effect as carriers navigate other lines of business exposed in the pandemic such as business interruption, directors and officers, and workers’ compensation.”


3/18/20 – Greyling Insurance brokers authored a summary of insurance coverage issues relating to Covid-19.

On March 18, 2020, Kristen Walker of Greyling Insurance authored a report detailing “Insurance Coverage Issues Related to the Coronavirus Pandemic.” The reports discusses coverage issues for various policy forms including:

1) Business Interruption and Extra Expense;

2) Employee Infection;

  1. a) Worker’s Compensation;
  2. b) Liability to Employees and Related Persons;
  3. c) Liability to Third Parties;

3) Liability Exposure;

  1. a) Professional Liability;
  2. b) Force Majeure;
  3. c) Commercial General Liability; and

4) Executive and Cyber Liability.


3/11/20 – Risk Management magazine discusses business interruption coverage concerns.

On March 11, 2020, William Lalor of Risk Management magazine detailed how “routine business interruption claims often present proof and quantification challenges, and in the context of COVID-19, the challenges are even greater and need to be taken into consideration by any potentially affected insurer or insured.”


2/20/20 – Willis Towers Watson discusses how policy language will be key to determining whether polices will cover losses related to coronavirus.

Coverage concerns related to the coronavirus were discussed in a blog post by Willis Towers Watson on February 20, 2020. It was concluded that “generally speaking, many factors affect whether a loss would be covered under insurance, including the type of loss, the type of coverage and the terms and conditions of specific policies.”