When the COVID-19 Pandemic incepted, and issues arose as to whether affected policyholders could seek Business Income and Civil Authority coverage from the presence or suspected presence of SARS-CoV-2 and consequent orders of Civil Authority, I thought that the easiest question to answer was whether such policyholders had suffered physical loss or damage (“PLOD”) to
Tomorrow’s supply chain – First-party insurance coverage for supply chains
Supply chain disruptions due to natural and man-made events, such as the COVID-19 pandemic, climate change, and global and regional conflicts, have become more prevalent in recent times. Businesses need to focus on these issues more carefully as part of their risk management strategies. Many companies seek to insure potential losses caused by disruptions to their supply chain through first-party or property insurance coverage. The insurance industry has designed a range of coverages for this exposure, the main one being contingent time element (or dependent property) coverage, which provides coverage when (typically) physical loss or damage to a third-party supplier or customer prevents that third party from supplying goods to or purchasing goods from the policyholder. Policyholders need to be aware of certain key issues with this coverage.Continue Reading Tomorrow’s supply chain – First-party insurance coverage for supply chains
COVID-19 business income claims – Will state appellate courts reject federal court predictions as to state law?
In the past few months, in cases considering whether SARS-CoV-2/COVID-19 can cause direct physical loss or damage to property so as to trigger business income coverage, policyholders have secured three wins in state appellate courts: Ungarean in the Superior Court of Pennsylvania, Huntington Ingalls in the Vermont Supreme Court, and Cajun Conti in the Louisiana
Lightening the load: New York Appellate Division rejects heightened pleading standard for policyholders seeking Bi-Economy Market consequential damages
In a recent unanimous decision, the Appellate Division First Department provided clarity on the pleading requirements for policyholders seeking special or consequential damages allowed under the landmark decision of Bi-Economy Market v. Harleysville Insurance Company of New York, 856 N.Y.S.2d 505 (N.Y., Feb. 19, 2008). Under Bi-Economy, policyholders may seek special or consequential damages resulting from an insurance company’s failure to provide coverage if such damages were foreseen or should have been foreseen when the insurance contract was made. Id. at 508. In its prior ruling in Panasia Estates v. Hudson Insurance Company, the First Department noted that the “reference to such damages as ‘special’ in Bi-Economy Mkt. … was not intended to establish a requirement of specificity in pleading.” 889 N.Y.S.2d 452, 453 (N.Y.A.D. 1 Dept., Dec. 15, 2009). The ruling, however, left open the question of what pleading requirements policyholders had to meet in order to state a claim for special damages, a question that it recently answered in D.K. Property v. National Union Fire Insurance Company of Pittsburgh, PA, 2019 WL 237454 (N.Y.A.D. 1 Dept., Jan. 17, 2019).
Continue Reading Lightening the load: New York Appellate Division rejects heightened pleading standard for policyholders seeking Bi-Economy Market consequential damages
Proving Your Business Income Loss: Defeating Insurance Company Challenges to Policyholder Evidence
Courts commonly observe that the purpose of Business Interruption or Business Income insurance is to put the policyholder in the same position it would have been in had there been no interruption. The Business Interruption inquiry is, thus, counterfactual. As such, for Business Interruption claims that go to trial, insurance companies and policyholders alike usually
Property Exposed to the Ebola Virus – Are Associated Business Income Losses Covered Under First Party Policies?
Can policyholders expect coverage for loss of Business Income if (1) they must close their business and decontaminate it after the property is exposed to persons with the Ebola virus or (2) civil authorities prohibit access to their property because of such exposure?
Continue Reading Property Exposed to the Ebola Virus – Are Associated Business Income Losses Covered Under First Party Policies?
A Quick and Dirty Guide To London Insurance Arbitrations
A dozen years after asbestos and environmental liabilities of U.S. companies led to the downfall of Lloyds’, London is again in the center of the liability insurance world—this time as the location for many insurance arbitrations over coverage for product and toxic tort liabilities. Foreign insurers insist upon arbitrating coverage disputes in London to avoid having their contractual obligations decided in the U.S. courts, where rulings in the 1980s and 1990s resulted in billions of dollars in insurance coverage awards and settlements for corporate America and asbestos trust funds. American companies need to be prepared for this new reality.Continue Reading A Quick and Dirty Guide To London Insurance Arbitrations
Internet Interruption May Trigger Insurance Coverage
On Dec. 19, 2008, underwater Internet cables in the Mediterranean Sea were cut, causing major connectivity issues to most Middle Eastern countries, as well as to South Asia. News reports are noting that while ships have been deployed to correct the issue, it could be upward of 10-14 days before connectivity is returned to normal.