By James Ballot, Senior Advisor, Strategic Communications, Triple-I It’s been more than 8 months since COVID-19 first struck the U.S., and millions of small company owners are still harming. All the while, a couple of complainants’lawyers are treating the pandemic as another
chance to make money from expensive insurance lawsuits. At a time when businessowners are searching for management to bring much required financial support, these very same lawyers are hoping legislators and judges will assist them retroactively rewrite organization income (interruption) (BI) insurance contracts. One essential figure in this effort is John Houghtaling, a New Orleans-based complainants’ legal representative who was featured in a recent Bloomberg Businessweek profile.
Yet, despite the efforts of Houghtaling and others, courts across the nation need to date extremely affirmed BI insurance coverage do not cover losses resulting from the COVID-19 pandemic. And the truths supporting these choices provide clear and unambiguous proof indicating BI insurance coverage are not designed to cover pandemic-caused organization disturbances.
Includes Michael Barry, Head of Media and Public Affairs, at the Insurance Information Institute, “Not one organization disturbance insurance plan in the U.S. was written on the assumption nearly every service would be disrupted at the very same time.” Barry includes, “This is why judges and regulators are regularly siding with insurance companies who argue direct physical damage to property is needed to trigger a business disturbance policy.”
Irrespective of insurers’ and trial attorneys’ contending viewpoints, the authors of the Bloomberg Businessweek post mention the requirement for definitive and timely action: “A yearslong legal battle may not be much help to having a hard time organizations,” the short article states. As the end of 2020 approaches, lawsuits looking for to compel insurers to cover pandemic-related earnings losses appears likelier to further the lawyers’ interests instead of those of businessowners seeking financial support.
Other potential options are on the table, most of which are taking shape around the idea that the federal government is the only entity with the reach and funds to assist companies recover from an event the magnitude of an international pandemic. On this point, a growing agreement of legal scholars and insurance market experts concur, with Stefan Holzberger, AM Best chief ranking officer, concluding in commentary to a current report, that “pandemic threat does not manage insurance companies any geographic diversification due to its global nature … Only a governmental program, or maybe a public-private collaboration, could offer the backstop adequate to make up for lost profits to companies.”
< img src="https://www.iii.org/insuranceindustryblog/wp-content/uploads/2020/11/bloomberg-video.png"alt class="wp-image-10875"srcset="https://www.iii.org/insuranceindustryblog/wp-content/uploads/2020/11/bloomberg-video.png 1020w, https://www.iii.org/insuranceindustryblog/wp-content/uploads/2020/11/bloomberg-video-300x166.png 300w, https://www.iii.org/insuranceindustryblog/wp-content/uploads/2020/11/bloomberg-video-768x425.png 768w, https://www.iii.org/insuranceindustryblog/wp-content/uploads/2020/11/bloomberg-video-672x372.png 672w"sizes="( max-width: 1020px) 100vw, 1020px"> Watch: Can Businesses Win the Fight Over COVID-19 Insurance Claims As a counterpoint to statements made by Houghtaling and other complainants ‘lawyers, Sherman Joyce, President of the American Tort Reform Association provides a contending vision for how American businesses can unify to recuperate economically from the COVID-19 pandemic:”Americans’elected agents– not the trial bar– must have the authority to regulate business within the U.S.”Joyce continues, “The courts must bring back that balance of power by rejecting the dreadful return of regulation through litigation.”