2020 has been a historic year for a number of reasons. Unfortunately, most of these developments have not been favorable. As a result of COVID issues, civil unrest issues, and historic wildfires, there have been significant legal issues which have impacted insurers and insureds.
To address these fascinating issues, Lether Law Group announces that it is hosting on its webpage a series of interviews addressing various issues such as COVID exposure, trying cases in 2020 during a pandemic, wildfires, protest claims, and other pertinent and relevant developments which have occurred in the insurance and legal world in 2020. Our first interview involving COVID coverage issues and the impact of COVID on the legal and business community is now available on our webpage at letherlaw.com/covid-19-resources
We invite everyone to review our webpage and learn a little bit more about Lether Law Group. Please take the time to watch what is hopefully an educational and informative interview as well.
Earlier today, the Panel for Multi-District Litigation issued an Order denying consolidation of hundreds business interruption coverage lawsuits related to COVID-19.
The Panel held that the allegedly common issues supporting consolidation, “share only a superficial commonality.” The Panel further held that there would be little potential for common discovery and that because each case will involve, “different coverages, conditions, exclusions, and policy provisions purchased by different businesses in different industries located in different states,” the differences in analyzing coverage will overwhelm any common issues.
The Panel held that consolidation would present serious managerial and efficiency concerns that make consolidation inappropriate for these claims.
COVID-19 Related Business Interruption in District Courts
As a result of this ruling, nearly all of the COVID-19 related business interruption lawsuits filed through the United States will remain in the District Courts where each case originated.
The exception may be for a limited number of insurers. The Panel has asked for additional briefing as to whether insurer-specific MDL’s might be appropriate for Lloyd’s, Cincinnati Ins. Co., the Hartford insurers, and Society Insurance.
Lether Law Group represented The Dentists Insurance Company in opposing MDL treatment for these matters. We are pleased that we were able to obtain this result. If you have any questions or if we can be of assistance on any COVID-19 related matters, including class actions, please feel free to contact us at any time.
The announcement included the following statements:
- Damage to commercial property/business caused by theft, vandalism, and/or fire should be covered under a commercial property policy unless that type of loss is specifically excluded;
- Coverage for damage to plate glass windows is dependent upon the individual policy language;
- Business that have been temporarily closed because of the COVID-19 pandemic are not considered vacant under the terms of an insurance policy; and
- A “war and military action” exclusion should not exclude damage caused during a protest.
In addition, the Insurance Commissioner advised business owners to take the following immediate steps if they plan on filing a claim: 1) contact their insurance company; and 2) consider hiring professional help with debris clean up and to secure their property to protect against further damage.
This announcement is not surprising given recent events and widespread resulting property damage.However, this advisement and increase in civil disturbance claims raise numerous coverage issues.These include the potential application of coverage exclusions including the vacancy exclusion, mitigation and duty to protect from further loss requirements, and valuation issues.
In addition, the steps necessary for an insured to properly mitigate damages and protect insured property from further loss is also fact dependent and will require a careful examination of the steps taken by an insured.Whether, and to what extent, any such mitigation efforts are covered by a policy will depend on the individual policy.The potential for coverage for any such steps should be discussed with an insured early in the claim handling process.
Finally, in light of the potentially severe impacts of the COVID-19 pandemic on business throughout the state and country, we expect more complicated valuation disputes.The risk of inflated claims may also increase.
Whether property damage by theft, vandalism, or fire is covered will ultimately be dependent upon the terms and conditions of the actual policy and the specific facts presented in any claim.As result, it is important that insurers proactively and thoroughly investigate each claim based on its unique facts.It will also be necessary to thoroughly and timely respond to these claims in order to avoid extracontractual exposures.
These are just a few of the potential coverage issues raised by the Insurance Commissioner’s announcement and the damage caused during by the recent civil disturbance claims.
Lether Law Group has been handling large first-party property losses for over 32 years.This includes earthquake claims, storm and hurricane losses, wildfire claims, and even a number of claims involving civil disturbances.If you would like to discuss these recent developments or any other matters, please feel free to contact us at any time.