This could be a very big deal. Some previous links after the jump.
From Reuters, June 17:
Louisiana appeals court dishes up win for restaurant in COVID business-interruption case
A Louisiana appeals court found that an all-risk property policy covered business-income interruption losses caused by COVID-19 shutdown orders and other operational restrictions.
In a 3-2 split Wednesday, Louisiana’s Fourth Circuit Court of Appeal reversed a bench verdict for Certain Underwriters at Lloyd’s, London in an action for declaratory relief filed by the operators of New Orleans’ 500-seat Oceana Grill. It's the first appellate win for an insured business according to a database at University of Pennsylvania Carey Law School.
Two of the panel’s judges found the policy’s requirement of “direct physical loss or damage” was ambiguous as applied to a temporary suspension of operations, and read it in favor of the insured restaurant. A third judge concurred on other grounds.
The two dissenters said the policy clearly required physical damage to property, and that there was no “manifest error” in the trial judge’s factual finding that the presence of COVID-19 did not cause physical damage. They also said the majority had ignored an express exclusion for “loss of use” in Lloyd’s policy, and had erred in relying on cases interpreting homeowners’ policies....
....MUCH MORE
The potential exposure for the insurance/reinsurance companies has to be in the hundreds of billions of dollars just in the U.S. and Europe.
Previously, beginning immediately following the lockdowns:
March 2020
P&C: Business Interruption Insurance—Here Come the Lawyers
July 2020
"COVID-19 insured loss reports reach $20.5 Billion"
And
that's with insurers doing everything they can, including preemptively
suing their own customers,* to keep a lid on business interruption
coverage payouts....
*Travelers Insurance Is Suing Its Customers To Preempt Business Interruption Claims (TRV)
Related:
July 17
Re/insurance: "U.S. riot losses accelerated & worsened by pandemic..."
June 3
Insurance: AXA cites Business Interruption as “material” in EUR 1.2bn Covid-19 Property/casualty loss estimate
May 24
Insurance Oh-Oh: "French court orders insurer to pay restaurant’s business interruption losses from coronavirus".
March 31
P&C: Business Interruption Insurance—Here Come the Lawyers
April 14
Insurance:"Anticipated Coronavirus Claims Scenarios Across Major Coverage Lines"
If interested see also:
Re/Insurance: "Berkshire Hathaway will write pandemic cover 'at the right price', Buffett says" (BRK)
As with terrorism insurance Warren would rather that governments take the risks,* the downside is just so huge....
Insurance Trade Groups: "Pandemics simply are not insurable risk..."
Whitney Tilson: "Berkshire's Exposure To Business Interruption Insurance" (BRK)
Insurance:"Anticipated Coronavirus Claims Scenarios Across Major Coverage Lines"
Insurance: "Coronavirus to be largest industry loss ever: Chubb’s Greenberg & Lloyd’s Neal"
The last line is:
"Lloyd’s has set aside £15 million to fund research into how pandemics and other big events can be better dealt with in future."As the kids say: "You had one job..."
Re/Insurance: "Pandemic could inflate hurricane industry losses by up to 20%..."
Most likely location for this unlikely occasion: the Lesser Antilles.
Unlike Fukushima, no nukes though.
So it would be hard to recreate the typhoon approaching the nuke plant devastated by tsunami caused by the earthquake* but, but volcano and pandemic!
I believe for the remainder of 2020 our motto should be "Hey, it could be worse!"
Knowledge@Wharton: "What Role Should Insurers Play in Covering Pandemic Business Losses?"
"Insurance: Epic Battle Over Covid-19 Coverage"
BigLaw on Big Insurance: Covid-19 Business Interruption Claims In The UK
