Will Insurance Cover Me for Losses Caused by Coronavirus?
CORONAVIRUS INSURANCE ISSUES PART 1:
You think you have insurance coverage. You think you need help, but challenging an insurance company sounds difficult. You may have reached out to your insurance agent or carrier, but they are giving you the high hat (meaning they are disrespectful and dismissive).
With this pandemic, we are learning new things every day. New law is developing every day as expert lawyers and law professors and insurance carriers puzzle over these issues and opine on the subject and more and more lawsuits are filed. We are in a wild, wild west of legal questions regarding insurance coverage. If the legal industry is sorting this out, someone without extensive legal training trying to figure it out would be dangerous in and of itself.
At VolkLaw we start our analysis of your insurance coverage questions with two steps:
1. What policies do you have?
2. What do your policies say?
An insurance policy is a contract you made with the insurance company. A well written contract is simply a set of promises and rules. “You do this, and I will do this. And if event “X” happens, we agree that this set of rules apply.” Unfortunately, insurance policies are very complicated and written to protect insurance companies as well as to protect you. We only partially jokingly says what the policy gives you is two pages that say, “congratulations you are fully covered” and forty-eight pages saying, “except for these things!” Think in terms of two concepts: insured risks and exclusions from coverage.
With Coronavirus, we will be looking for a possible key sources of coverage. Those include commerical general liability insurance, property insurance, business interruption insurance, errors and omissions insurance, director and officer liability insurance, and workers compensation insurance. Lawsuits are already being filed. As an example, a New Orleans restaurant has sued under what is called a declaratory judgment action to detemine whether it is ordered to close.
CORONAVIRUS INSUARANCE PART 2: Business Interruption Insurance
Is it possible that I have insurance coverage that could pay for losses I suffer due to my business closing or suffering a slowdown?
Business interruption insurance is generally an insurance product that covers the loss of income that a business suffers as a result of a certain type of event and it usually takes a disaster-level event to get coverage. A fire shutting you down is an example. If you have business interruption insurance in your property policy, the loss of income could be covered while you are trying to get reopened. You will ordinarily find this kind of coverage as part of your coverage in a policy covers many possibilities rather than being its own stand-alone policy. It will be a challenge to argue coverage due to an epidemic. It may be specifically excluded from coverage. A careful reading of the policy is required.
As said, the policy language is critically important, and the insurance industry realized that after the SARS outbreak that this sort of coverage could destroy them. So, polices were generally amended to exclude coverage for losses due to virus or bacteria. Your policy must be examined to see if you have this exclusion and whether there is an argument to be made that coverage still exists in spite of an exclusion like this.
And, you may have a different type of specialized coverage such as for the hospitality and health care industry that could insure against communicable and infectuous diseases. There can also be coverage for governmental impairment of access to your business location.
Many business interruption coverages are tied to property damage claims like those resulting from a fire or flood or water line breakage. Could a government ordered shutdown cause coverage? A good lawyer can help you figure it out.
CORONAVIRUS INSURANCE PART 3: Errors and Omissions Insurance
What if customers or clients threaten to sue you or your company for bad work resulting from these crisis conditions?
In some limited circumstances, errors and omissions coverage may help you.
An errors and omissions policy can cover certain kinds of mistakes and bad behavior by employees. One legal dictionary defines it this way: “An insurance clause which provides protection against liability for the commission of an error or an omission in the performance of professional duties and obligations. Typically to cover financial losses and not personal injury damages claims.” (dictionary.thelaw.com) Another defines it this way: “errors and omissions… (is) short-hand for malpractice insurance which gives physicians, attorneys, architects, accountants and other professionals coverage for claims by patients and clients for alleged professional errors and omissions which amount to negligence.”(legal-dictionary.thefreedictionary.com).
Director and Officer coverage may exist although you may see a bodlly injury exception. Note that exclusions for fraud, dishonesty, and violations of law will probably be seen in the policy.
As people are forced to work under difficult circumstances or work from home, all while being distracted by what is happening to our society and those around us, more mistakes in work will occur.
CORONAVIRUS INSURANCE PART 4: Dealing With Your Insurance Company
You might have the best policy in the world issued by a very solvent carrier with a sophisticated claims handling process and you may still need help getting paid. A good lawyer can help you make your claim and deal with the insurance carrier to make payment when the carrier does not want to. While most carriers will deal with you in good faith, some seem to make it a business policy to make your life miserable if you make a claim. Some of the tricks are:
- Intentional underpayment of a claim
- Wrongful denial of a claim
- Failure to provide a reasonable explanation for the denial of a claim
- Failure to properly investigate a claim
- Failure to timely investigate or pay a claim
- Misrepresenting provisions within the insurance policy
Sadly, when we are most in need is when we often can least afford a long drawn out battle. Or, to just roll over and give up. The sooner you are effectively helped, the sooner you will be treated fairly. There are a lot of laws protecting you from bad insurance carrier behavior. Think of them under a catch-all called bad faith. We can help you figure out if what they did violated your contract rights and the laws protecting you. And then, help you get paid if you are are covered.
And now the careful (paranoid?) lawyer's disclaimer:
The matters discussed here are general in nature and are not to be relied upon as legal advice. Every specific legal matter requires specific legal attention. The law is constantly changing and matters discussed today may not be the same tomorrow. Legal matters are also subject to different interpretations by attorneys, judges, jurors and scholars.
No attorney-client relationship is intended or created as a result of matters discussed here or by submitting a contact form. The Firm does not represent you unless and until you and the Firm execute a written Representation Agreement and you pay any requested retainer. The Representation Agreement will set forth the terms and conditions of representation. If your legal problem involves a potential lawsuit, a lawsuit must be responded to as described in the Summons you received or a Complaint filed within a certain period of time called a Statute of Limitations. Therefore, if we do not represent you, the Firm strongly urges you to immediately consult with another attorney to protect your rights.
If you send in a contact form on the web site we will have to screen your matter for conflicts prior to an attorney consultation. As a general proposition, loyalty to a client prohibits undertaking representation directly adverse to that client's or another client's interests without the affected client's consent. The Firm’s decision not to represent you should not be taken by you as an expression regarding the merits of your case.
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