Business Interruption Insurance Claims and the Coronavirus Epidemic: Round 2
In a previous post, the business interruption claims lawyer at The Doan Law Firm discussed the issue of business interruption insurance claims related to the Coronavirus epidemic and state/local government-mandatory business closing orders. In the latest twist to arguments as to whether or not insurance carriers are liable for such claims, Insurancejournal.com is reporting that lawmakers in at least 4 states (Massachusetts, New Jersey, New York and Ohio, as of March 30th) are proposing legislation to force insurance carriers to pay business interruption claims brought about by “social distancing” restrictions and/or mandatory shutdown orders.
In New Jersey the proposed legislation, Assembly Bill A-3844, would require that every business interruption policy that was in force from March 9th forward will be understood as covering business interruption claims brought about by a global virus pandemic or efforts to limit virus transmission.
In New York, Assembly bill A. 10226 aims to require insurers to cover “business interruption during a period of a declared state emergency due to the coronavirus disease 2019 (COVID-19) pandemic.”
In Ohio, House Bill 589 would “… require insurers offering business interruption insurance to cover losses attributable to viruses and pandemics…..” to include “… coverage for business interruption due to global virus transmission or pandemic during the state of emergency…” that began on March 9th 2020.
In Massachusetts, Bill SD.2888 goes even further than the New Jersey, New York and Ohio bills and would require insurers to honor all business interruption loss claims “… notwithstanding the terms of such policy (including any endorsement thereto or exclusions to coverage included therewith) … for business interruption directly or indirectly resulting from the global pandemic known as COVID-19, including all mutated forms of the COVID-19 virus.”
There is even talk that Congress may consider federal legislation that would include at least some of the provisions mandated in the above-mentioned legislation! Regardless of the eventual success of either state or federal legislative actions, there will certainly be an avalanche of business interruption claims filed that will be followed by another avalanche of claim denials and court cases until this matter is settled.
As you might imagine, insurers are gearing up to fight both potential claims under existing policies that exclude claims where there has been no physical damage to an insured’s place of business as well as the prospect of not being to write policies containing physical damage clauses in the future. In all fairness to the insurance industry, this is understandable since sources quoted by Insurancejournal.com estimate that insurers could be facing more than 30 million Coronavirus-related claims from individuals and small business that could lead to insurance industry losses of from $220-383 billion per month. The insurance industry as a whole handled only about 3 million claims as a result of the 2005 hurricane season that included Hurricanes Katrina, Rita and Wilma, while insured losses from 2017’s Hurricane Harvey are estimated to have been “only” about $125 to 150 billion.
As we have stated before, the degree of the economic disaster facing the nation as a result of the Coronavirus epidemic does not absolve insurers of their legal obligation to pay all legitimate claims filed by their policyholders. While it remains to be definitively decided if the courts will rule that mandatory closures are indeed covered by business interruption insurance, our business interruption insurance lawyer believes that such claims will be allowed.
Since insurance claims are processed, and paid, on a “first come first served” basis, we urge you to contact our business interruption loss lawyer to arrange for a review of your business insurance coverage and a discussion of the legal avenues that may be open to you should your claim be denied by your insurance carrier.
At The Doan Law Firm, there is never a fee to review the facts in your business interruption insurance case or for your first consultation with our business interruption insurance lawyer. Should you decide that a lawsuit against your insurance carrier is in order, and that you would like to have us represent you in court, we are willing to work with you in arriving at a fee schedule that will insure that you receive the lion’s share of the settlement we are prepared to win for you.
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