By James Ballot, Senior Advisor, Strategic Communications, Triple-I
It's been more than eight months since COVID-1
At a time when entrepreneurs are looking for leadership to provide much-needed financial support, the same lawyers hope for legislators and judges. helps them to retroactively rewrite business income (interruption) (BI) insurance contracts. A key figure in this trial is John Houghtaling, a New Orleans – based plaintiff's attorney who was featured in a new Bloomberg Businessweek profile.
Yet, despite the efforts of Houghtaling and others, courts across the country have so far overwhelmingly confirmed BI insurances do not cover losses due to the COVID-19 pandemic. And the facts that support these decisions provide clear and unequivocal evidence that BI insurances are not intended to cover pandemic interruptions.
Adds Michael Barry, Head of Media and Public Affairs, at the Insurance Information Institute, “Not a business termination insurance company in the United States was written on the assumption that almost all companies would be discontinued simultaneously. "That's why regulators and judges consistently agree with insurers who claim that direct physical damage to property is needed to trigger a business interruption policy," Barry adds. The Bloomberg Businessweek article cites the need for swift and decisive action: "A year-long legal battle may not be of much help to struggling companies," the article said. As the end of 2020 approaches, disputes aimed at forcing insurers to cover pandemic-related income losses appear more likely to advance lawyers' interests as opposed to those seeking financial assistance for entrepreneurs.
Other potential solutions are on the table, most of which take shape around the idea that the federal government is the only entity with scope and financial resources to help companies recover from an event in the wake of a global pandemic. On this point, a growing consensus among lawyers and experts in the insurance industry agrees with Stefan Holzberger, AM Best Chief Rating Officer, who in a commentary on a new report concludes that "pandemic risk does not give insurance companies any geographical diversification due to its global nature. … Only a government program, or perhaps a public-private partnership, could provide backstop enough to compensate for lost revenue to companies. ”
Look: Can companies win the battle for COVID-19 Insurance Claims
As an opposite to statements by Houghtaling and other plaintiffs 'attorneys, Sherman Joyce, president of the American Tort Reform Association, presents a competing vision for how U.S. companies can unite to recover financially from the COVID-19 pandemic: "Americans' elected representatives – not the trial – should have the power to regulate business in the United States "Joyce continues," The courts must å restore this balance of power by rejecting the dreaded return of dispute settlement. "