The Complex Insurance Coverage Reporter – March 2020

To Our Readers:

In just a matter of days, we have seen the coronavirus (COVID-19) take off and dominate nearly every aspect of our lives. Reports of serious personal, economic and other impacts that have now become commonplace were unimaginable to most just a few weeks ago. Please know that our thoughts are with you all in this challenging and uncertain time. A time when business is anything but “as usual.”

Many of us are working remotely and finding it increasingly difficult to break away from the 24/7 news cycle and the latest word on the pandemic. At the same time, we see legal and other developments in this area changing hour by hour. That makes it especially important for those of us in insurance and litigation to keep up and we hope that you will continue to turn to Coverage Reporter as a resource.

Already, insurance departments and legislatures (among others) have begun to take action over COVID-19. The West Virginia Insurance Commissioner, for one, has recognized that “workforce limitations and personal contact restrictions may cause disruption to an insurer’s or other regulated entity’s normal claims handling operations and procedures.” The state declared an “insurance emergency” and ordered that normal timeframes for claim handling and settlement as specified are suspended until further notice. Insurers were told not to issue cancellation or nonrenewal notices if the reason is “a result of circumstances stemming from the COVID-19 pandemic and the corresponding State of Emergency . . . .”

West Virginia is by no means alone in its response. California’s insurance commissioner, for example, has called for a grace period on premium payments of at least 60 days. In New Jersey, the state legislature recently introduced a bill designed to compel insurers to pay some coronavirus business interruption claims. And some in Congress have urged members of insurer and agent/broker groups to “make financial losses related to COVID-19 and other infectious disease-related losses part of their commercial business interruption coverage for policyholders.”

Predictably, insurer and policyholder counsel are already squaring off over the existence of coverage for these claims. Just last week, the first COVID-19 business interruption coverage lawsuit was filed in Louisiana. There, the policyholder — which calls itself a “well-known New Orleans restaurant in the heart of the French Quarter” — alleges that a declaratory judgment will “prevent the plaintiffs from being left without vital coverage acquired to ensure the survival of their business should operations cease due to a global pandemic virus and civil authorities’ response.” Expect more to come.

We continue to closely monitor and report on coronavirus and related insurance developments. You can read more about that here. We also continue to report on other developments in the insurance industry, which we invite you to read about below. Above all, please take care of yourselves and be safe.

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