The State of Washington has recently clarified its list of essential services which are permitted to remain open during the current health crisis. That notification clarifies that insurance is considered an “essential service”. See notification link below. We understand that other states have similarly concluded that insurance is an essential service and any “stop work” orders or “work from home” orders do not necessarily apply to insurance companies.
This position underlines what Lether Law Group has always believed. Insurance is an essential service. Even during the worst crisis, claims continue to occur. Car accidents happen. Fire losses happen. Lawsuits are filed.
Insurance has been an integral part of the American economy since colonial days. In fact, the oldest insurers in the United States predate the formation of this country. As a result, no matter how difficult times are the insurance industry will survive and continue to be a cornerstone of the American economy.
With this in mind, it is important to remember that in most states there has been no extensions or waivers of any of the time deadlines which apply to the insurance industry. For example, it is still necessary to comply with any “Fair Claims Settlement Practices Act” regulations and the time periods set forth within those regulations. Although it is difficult when claims professionals are working from home to keep up with all of the requirements that are placed upon insurers, it is now more than ever crucial for all insurers to bear in mind that once this pandemic is over there will be a significant increase in claims activity. Insurers that have not complied with their obligations during the shutdown period will be exposed to significant extracontractual claims.
Moreover, as all insurers are aware, most departments of insurance and/or governors around the country have issued bulletins and notifications to insurance companies to provide additional services to their insureds during this time. A failure to comply with these requirements will likewise lead to extensive bad faith claims litigation.
Given the fact that insurance is an essential service, the Lether Law Group continues to operate on a daily basis in order to provide services to its insurance clients during this difficult time. If you have questions about any state-specific requirements which have been enacted due to the COVID-19 pandemic or general questions in regard to pending insurance claims and compliance with any regulatory requirements, please feel free to contact our office.