Businesses Gear Up for Wave of Insurance Bad Faith Litigation Over Coronavirus-Related Claims
Businesses Gear Up for Wave of Insurance Bad Faith Litigation Over Coronavirus-Related Claims Apr 2, 2020 The issue of the coronavirus potentially causing business losses and a number of U.S. companies thinking that their insurance policies cover this loss of revenue due to the outbreak will likely be a significant source of insurance bad faith litigation as we face more and more losses due to the virus. According to the Organisation for Economic Cooperation and Development, if the virus continues along its current path, it could cut the year’s global growth by half to 1.5 percent for the year, causing a $1.5 trillion loss due to the disease. Business Interruption & Contingent Business Interruption Insurance Policies Many are estimating that these losses will be greater than disasters such as Hurricane Katrina, but less likely to be insured. This is because while most-all companies have business interruption insurance as part of their insurance policies in order to cover operations losses when business has to halt unexpectedly, these policies are almost always linked to “direct physical loss or damage” as the definition of what constitutes loss that validates payment, and quarantines do not cause physical damage in the same way that a fire or earthquake does. This same logic also essentially applies to contingent business interruption insurance policies, which cover disruptions due to policyholders’ suppliers. Even if some insurers do agree to cover decontamination costs after an outbreak, they tend to tightly regulate these costs, having strict ceilings and limits on how much they pay out to cover them. This is likely due, in part, to disasters linked to SARS, Ebola, and Zika outbreaks, all of which lead to a number of business interruption claims that became unwieldy such that a number of insurance companies took steps to explicitly exclude outbreaks from business interruption claims in contracts. Some companies even took steps to come up with a specific, separate type of business insurance that was specific to outbreaks like these and which is designed to kick in when deaths due to an epidemic reach a certain threshold or when a particular event occurs, such as a travel ban or government shutdown, where the business chooses the event and customizes the insurance policy based on its own assumption of risks. Florida Insurance Bad Faith Attorneys Representing Insurance Carriers Still, in spite of these clear policy limits spelled out in insurance contracts and insurance companies only being enabled to pay out benefits where coverage and liability are clear, a “storm” of litigation is expected over this issue as companies try to get around these exclusions, potentially arguing that an outbreak epidemic constitutes “physical damage” to the workplace. HD Law Partners represents insurance carriers when there are good faith disputes over coverage, damages, or liability, as well as defense of claims alleging insurance bad faith or plaintiffs seeking extra-contractual liability. Contact our Tampa insurance bad faith attorneys today with any questions you might have about our services. Resource: nytimes.com/2020/03/05/business/coronavirus-business-insurance.html oecd.org/economy/global-economy-faces-gravest-threat-since-the-crisis-as-coronavirus-spreads.htm Latest Trends in Insurance Litigation Posted in Insurance Bad Faith | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us