There has been a tremendous increase in claims activity. Of course, the primary increase we have seen have been business interruption losses as a result of governmental shutdowns and COVID-related shutdowns. There have been literally hundreds, if not thousands, of business interruption losses that have been presented to the industry. So, those have just become a cottage industry overnight. In addition to those types of claims, we are seeing an increase in fraudulent and suspected claims activity, arson losses, fraud losses. The kind of claims you see when you do have tough financial times. There is always going to be an increase in those kinds of claims. And then finally, as a collateral matter, we have definitely seen a dramatic increase in claims associated with civil disturbance riot-related claims. So, the last seven months or so have been quite busy.

It is a complex set of coverage issues. Almost all commercial policies, property policies, have an element of business interruption coverage. The triggering event in regard to that type of coverage is that there needs to be some kind of physical loss or damage to the actual structure in order for there to be a business interruption claim. For example, your typical case would involve a business that has a fire. Because of the fire, they are obviously closed, but there is damage to the business as a result of the fire. The question in the COVID case, is there any actual physical loss or damage to the business, and without that physical loss or damage, is there any opportunity to make a claim for business interruption associated with COVID? An additional issue of course involves whether or not that loss is going to be excluded under the policy. Most policies have some form of a virus exclusion. And that virus exclusion is probably going to be upheld to preclude claims associated with COVID since COVID is arguably a virus. In addition to the business interruption-type claims, you are seeing claims for civil authority shutdowns. Many policies have separate coverage for civil authority. Unfortunately, though, that coverage is often limited and also does require there to be actual business physical loss or injury to the building. So, if you do not have physical loss or injury as a result of the COVID situation, you are probably not going to have a claim for civil authority coverage either.

That really is the million or 5-billion-dollar question. In all likelihood, probably not. Due to the fact that you do not have evidence of physical loss or injury, physical loss or damage, you are not typically going to even have a trigger of the business interruption coverage or civil authority coverage. In addition, as I mentioned, because of the virus exclusions, that is typically going to preclude any type of a COVID claim.

The pure volume of COVID claims is overwhelming. There are just hundreds, if not thousands, of these claims being presented around the country. I think every single state in the country has some level of COVID litigation that is ongoing. So, the number of cases is overwhelming. The amounts that are being discussed are truly significant. Many of these claims are worth hundreds and millions of dollars just due to the nature of shutting down businesses for this amount of time. So, the exposures of both under the policy for insurers are significant and large. In addition, you are going to have exposures with claims handling and how insurance companies adjust and investigate these claims. So, that will be something insurers will be mindful of as they move forward and adjust and address these types of claims.

No, all claims should be looked at on their own merits they should be investigated and adjuster by insurers just like any other claim. I think sometimes there is a tendency to look at the COVID claim and, perhaps, make a decision that there is no coverage based on just the policy without really digging into the claim, really investigating the claim. I think it is important to investigate each and every claim and adjust each and every claim on its own merits. So, just like any other claim, I think you need to be careful, you need to be mindful of your insured’s position on these claims, and you have to communicate your decisions and your request for information and your final coverage position to the insureds is appropriate, just like you would do in any other claim.

As I mentioned, there are literally hundreds of claims everywhere. We are seeing individual claims, individual lawsuits by businesses, we are also seeing class action litigation that has been filed in various jurisdictions. In fact, there was an effort to even consolidate all of the class actions into one nationwide class action. That was referred to as the multi-district litigation matter. That matter ended up not being certified as a nationwide class action, it does appear that there may be an effort to make that more of a regional class action, but the national class action efforts have not gone very far. The class action suits themselves have not really progressed very far at this point. Lether Law Group has actually filed successfully one motion in regard to a class action to seek disqualification of the class. In regard to the individual actions, by and large, the Courts around the country have found no coverage and granted either motions to dismiss or motions for summary judgment. There has only been a few isolated incidences where Courts have allowed the cases to proceed. Most of these cases, the Courts are granting motions to dismiss just on the pleadings finding that there is no coverage.

I think it is going to continue as it has been for the past several months. I think you are going to continue to see Courts granting motions for summary Judgments to motions to dismiss in favor of insurers on these types of claims. I think in rare instances you may have some Courts that say these claims should be decided by a trial of fact. But for the most part, I think you are going to see the trend to continue with dismissals. I do think there may be a second wave of litigation involving claims handling activities, bad faith claims, extracontractual claims, involving how insurers handle the claims, and how they adjust and investigate the claim. Beyond the business interruption claims, however, what we are going to see for probably a number of years down the road, are lawsuits involving everything from employment relations, HR-type claims, workplace claims involving COVID, claims involving medical facilities, claims involving assisted living facilities, public claims involving hospitals, schools, all of that type of claim activity involving potential bodily injury is going to be something that is going to be with us for a very, very long time.

Well, I do not think it will ever be what it was in 2019. I think what we are going to continue to see is Courts having to do business in a new world. Courts throughout the northwest and for most of the country are closed or on a limited basis. So you only have business being done remotely, Zoom calls, and calls done with similar formats for a lot of hearings, certainly for arbitrations or mediations or depositions. But even Court hearings. I have actually done a Zoom Washington state Supreme Court hearing. So, I think that is how we are going to be doing business for at least the rest of this year. I note some Courts may be attempting to do some remote jury trials in the civil arena. But I think for the most part, in the federal court system, you are going to be seeing Zoom civil trials. So, it is going to be very different. In 2021, I think it really is going to depend on what happens with the potential vaccine, what happens with people getting back to work. But even in 2021, I think there is going to be a higher use of remote access to the legal system. I think the days of going down to the courthouse are not going to be what they once were.

I do not think so. I think we all adapted as a result of necessity and with doing things differently. And I think we are going to continue to do things differently, you know, utilizing remote access to hearings, to arbitrations, to mediations, to depositions. I think attorneys and clients have now gotten to the point where they realize that those types, that way of doing business works and it works really well. So, I think we are going to be in a world where we are not seeing each other as much, we are doing a lot more phone calls and videoconferencing.

I think there are positive and negative effects. I think on the positive side, we have all learned to be more efficient, which is beneficial to our clients. We are not travelling as much, or having to get on airplanes to go do business. I think those are all good things for clients and something that clients appreciate. That is going to continue. On the negative side, I am always concerned about an inability for people to meet face to face. I think a face to face experience can be very beneficial. For example, you are taking a deposition, or you are in a mediation, it is always good to have that interpersonal relationship. I think that is going to be something that is going to be missed by practitioners. And then of course, I think for younger lawyers, not being in an office environment with good mentorship and training can be something that long term may limit their growth as lawyers. Hopefully we start to balance as we move forward where we can be efficient. We can utilize the technology, but at the same time we can get together and still be lawyers.