One of the craziest chapters ever written concerning insurance coverage litigation entails Covid-19 first-party insurance coverage instances. Judges, typically with out accepting any scientific proof, merely dominated that Covid-19 doesn’t trigger bodily harm. The Catch-22 problem is that the insurance coverage business wrote an endorsement to exclude Covid-19, and a few insurers admitted {that a} covid kind of situation can be lined and not using a particular exclusion.
A movement filed final week involving Affilated FM reveals how some insurers arrange claims processes designating Covid-19 losses as a “physical loss.”1 A on line casino in Las Vegas argued the next in a movement it filed final week:
AFM instructed the Court that proof didn’t exist when that proof not solely did exist however instantly contradicted AFM’s central positions on this case. AFM asserts {that a} communicable illness can’t trigger bodily loss or harm. This can’t be squared with AFM’s claims guide, which incorporates Loss Code 60, overlaying ‘Physical loss or damage which results from the actual presence of a communicable disease and the associated business interruption as defined in the policy.’ Email of Jason Wing to Richard Sunny (Mar. 4, 2020)…AFM assigned Loss Code 60 to Treasure Island’s declare.
…
The proof that AFM hid plainly meets the relevance customary of Fed. R. Civ. P. 26(b)(1) as a result of it’s related to Treasure Island’s declare. AFM asserts {that a} communicable illness can’t trigger bodily loss or harm, however its claims guide contradicts that assertion. Loss Code 60 explicitly states {that a} communicable illness may cause bodily loss or harm. That is precisely what Treasure Island has asserted. Some communicable ailments, reminiscent of AIDS, don’t trigger bodily loss or harm to property as a result of they don’t use property as a transmission mechanism. Others, reminiscent of COVID-19, may cause bodily loss or harm to property as a result of they do use property as a transmission mechanism. Whether a communicable illness within the latter class does trigger bodily loss or harm to property is a query of science, relying on whether or not the severity of the virus within the transmission medium (insured property) makes that property unfit for its insured use. COVID-19 did precisely this, distinguishing it from the widespread chilly. The extent and period of the impression and harm is a matter of the quantum of damages, not the set off of protection. Treasure Island’s skilled Dr. Joseph Lewnard will testify to precisely this.
The downside for policyholders is that the overwhelming majority of judges have dominated that Covid-19 didn’t trigger “physical damage” with out holding evidence-based hearings on the matter. They merely refused to listen to and weigh the scientific proof or permit discovery concerning what most of the insurers admitted could also be lined earlier than Covid-19 struck the world. Most instances had been misplaced at a preliminary stage with out discovery ever occurring.
The instantaneous cited matter is only a movement, and Affiliated FM could have its day to reply. We will hold you recent on any developments. But it doesn’t matter what the proof reveals, wins have been few and much between for policyholders concerning Covid-19 litigation.
Thought For The Day
Energy and persistence conquer all issues.
—Benjamin Franklin