Insurance Law
This section includes literature on business (including business interruption), life, health and medical liability insurance. Bainbridge, Jessica, ‘Sorry, We Don’t Cover That: The Restaurant Industry’s Continuing Battle with Insurance Companies Amidst the Pandemic’ (2022) 83 Ohio State Law Journal Sixth Circuit Review Article 002 Abstract: The Sixth Circuit’s recent decision, Santo’s Italian Café LLC v. Acuity Insurance Company, continues the federal appellate trend of denying business interruption insurance claims related to the coronavirus pandemic. This September, the Sixth Circuit upheld that the government suspension of in person-dining due to the coronavirus pandemic did not cause ‘direct physical loss of or damage to property’ and thus was not covered by Santo’s business interruption insurance. Further, the court reasoned that despite the suspension, the Café still owned the entire restaurant space and could ‘still put every square foot of the premises to use, even if not for in-person dining use.’
Blight, Christine and Michael Chaaya, ‘The Impact of PYS, PMIF and COVID-19 on Insurance in Superannuation’ (2020) 31(9–10) Australian Superannuation Law Bulletin 170–172 Abstract: With the COVID-19 early release of superannuation measures, there has been significant commentary on the impact of making an early withdrawal from superannuation funds. But there is also the ‘sleeper’ issue of how mass withdrawals will broaden the issue of underinsurance while funds and their members are still coming to terms with the impact of the Protecting Your Super (PYS) and Putting Members’ Interests First (PMIF) legislation.
‘Business Interruption Clarification’ (2020) 170(7902) New Law Journal 5 Abstract: Notes Financial Conduct Authority v Arch Insurance (UK) Ltd (Comm), a test case on business interruption insurance claims arising from the coronavirus pandemic.
Chan, Laina, ‘“Certain Underwriters at Lloyd’s of London v Dural 24/7 Pty Ltd”: A Triumph of Common Sense’ (2022) 37(7/8) Australian Insurance Law Bulletin 137–138 Abstract: In ‘Certain Underwriters at Lloyd’s of London v Dural 24/7 Pty Ltd’ the underlying issue was whether the policy underwritten by Certain Underwriters at Lloyd’s of London covered business interruption caused by the COVID-19 pandemic. The difficulty arose because the legislation referred to in the Policy defined diseases by reference to the repealed Australian ‘Quarantine Act 1908’ (Cth). The Insurers therefore sought a declaration to the effect that ‘or other diseases declared to be quarantinable diseases under the Australian 'Quarantine Act 1908’ meant ‘or other listed human diseases under the “Biosecurity Act 2015 (Cth)”’. The declaration was made.
Cotter, Daniel A, ‘A Pandemic Walks into a Bar: The Covid-19 Pandemic and Business Interruption Insurance’ (2020) 34(3) CBA Record 30–32 Introduction: Unlike most catastrophes and major events, which are geographically contained, the Covid-19 crisis has affected everyone across the United States, with the vast majority of Americans subject to shelter in place orders to ‘flatten the curve.’ With such orders came major business disruptions and closures. When people face the potential for major financial disruption to their households and businesses, they seek sources of money to help assuage the losses, as ‘desperate times call for desperate measures.’ One source of potential funds that many businesses have turned to is insurance and, more specifically, business interruption coverages. This article addresses those coverages and the coverage disputes storm that is brewing.
Dolgay, Cody F, ‘COVID-19 Insurance and Healthcare Considerations’ (2020) 2 Emerging Areas of Practice Series - COVID-19 (Coronavirus) Westlaw Canada Extract: The Canadian health and long term care industries have been hit particularly hard by COVID-19. It would appear that this has not gone unnoticed by insurance underwriters. We are now aware that at least two large national insurers have begun to implement dramatic changes to the policies that they underwrite for health care organizations and long term care facilities. Specifically, it appears that a ‘Contagious Disease Exclusion Endorsement’ is being added to some policies upon renewal. This broad Endorsement purports to completely remove from coverage ‘any claim, action, occurrence, accident, loss, damage, injury, cost, expense, fee, charge, fine, penalty, or other amount’ alleged to be caused directly or indirectly by a number of contagious diseases listed in the Endorsement.
Eggleton, Senara and Özlem Gürses, ‘Reinsuring Pandemics: The Role of Government and Public–Private Partnerships between Reinsurers and Governments’ (2023) The Geneva Papers on Risk and Insurance - Issues and Practice_ _Abstract: Pandemic-related business interruption (BI) losses are generally considered ‘uninsurable’ because, in order to pool sufficient premium revenue to meet valid claims, premiums would be unaffordable for the majority of policyholders. This paper explores whether and how such losses might be made insurable in the U.K. The authors consider post-pandemic governmental responses, including the role of the Financial Conduct Authority (FCA) and the meaning and implications of FCA v Arch Insurance (U.K.) Ltd ([2021] UKSC 1). The central premise of the paper is to highlight the importance of reinsurance in increasing an underwriter’s insuring capacity and to illustrate how, with the support of government in the form of a public–private partnership (PPP), ‘uninsurable’ risks of this type may be made insurable. The authors propose a PPP, ‘Pandemic Business Interruption Re’, which provides, in their view, a feasible and defensible solution that would confer the benefit of increasing policyholders’ faith in the industry’s ability to underwrite pandemic-related BI claims and reduce reliance on ex post government aid.
Eyerly, Tred, ‘Is the Presence of Coronavirus “Direct Physical Loss or Damage”' Under a Property Policy?’ (2020) 24(7) Hawaii Bar Journal (forthcoming) Extract: Whether the presence of coronavirus creates “direct physical loss or damage” is currently a hotly contested issue. Early indications are that coronavirus remains on objects and surfaces. The duration can be from a few hours to three weeks, depending on the type of surface material. If a customer or employee is infected and the store or restaurant must closed because the virus may rest on surfaces within the building, is there direct physical loss or damage, even though the building structure itself is unharmed? While Hawaii case law offers no definitive answers, cases from other jurisdictions offer contrasting opinions.
Fiodoroff, Natasha and Kim Waygood, ‘Life Insurance and the Coronavirus Disease (COVID-19)’ (2020) 36(1) Australian Insurance Law Bulletin 2–5 Abstract: The World Health Organisation (WHO) website records that globally, as at 20 April 2020, there have been 2,245,872 confirmed cases of COVID-19, including 152,707 deaths, reported to WHO. The first case of COVID-19 was traced back to Hubei Province in China in mid-November 2019. Five months later, a total of 6,606 cases of COVID-19 have been reported in Australia, including 70 deaths.The life insurance industry is now in the unexpected situation of having to radically respond to enormous changes, at extremely short notice. Who would ever have thought that a virus could change the world almost overnight? This article looks at how COVID-19 has impacted upon and will change the life insurance industry.
Freeman, Iain, ‘Business Interruption Insurance and COVID-19’ (2020) 36(1) Australian Insurance Law Bulletin 6 Abstract: The COVID-19 virus has had a profound impact on many businesses in Australia. They have had to change the way in which they work or, in many cases, have even closed down. With that, there has been a significant decrease or complete loss in revenue or an increase in cost of working. Understandably, many businesses have been interested to understand if their business interruption insurance policy may come to their aid. Regrettably, in many cases, it will not.
Frees, Edward W and Fei Huang, ‘The Discriminating (Pricing) Actuary’ (SSRN Scholarly Paper ID 3592475, 4 May 2020) Abstract: The insurance industry is built on risk classification, grouping insureds into homogeneous classes. Through actions such as underwriting, pricing and so forth, it differentiates, or discriminates, among insureds. Actuaries have responsibility for pricing insurance risk transfers and are intimately involved in other aspects of company actions and so have a keen interest in whether or not discrimination is appropriate from both company and societal viewpoints. This paper reviews social and economic principles that can be used to assess the appropriateness of insurance discrimination. Discrimination issues vary by the line of insurance business and by the country and legal jurisdiction. This paper examines social and economic principles from the vantage of a specific line of business and jurisdiction; these vantage points provide insights into principles. To sharpen understanding of the social and economic principles, this paper also describes discrimination considerations for prohibitions based on diagnosis of COVID-19, the pandemic that swept the globe in 2020. Insurance discrimination issues have been an important topic for the insurance industry for decades and is evolving in part due to insurers’ extensive use of Big Data, that is, the increasing capacity and computational abilities of computers, availability of new and innovative sources of data, and advanced algorithms that can detect patterns in insurance activities that were previously unknown. On the one hand, the fundamental issues of insurance discrimination have not changed with Big Data; one can think of credit-based insurance scoring and price optimization as simply forerunners of this movement. On the other hand, issues regarding privacy and use of algorithmic proxies take on increased importance as insurers’ extensive use of data and computational abilities evolve.
French, Christopher C, ‘COVID-19 Business Interruption Insurance Losses: The Cases For and Against Coverage’ (2020) 27 Connecticut Insurance Law Journal 1–35 Abstract: The financial consequences of the government-ordered shutdowns of businesses across America to mitigate the COVID-19 health crisis are enormous. Estimates indicate that small businesses have lost $255 to $431 billion per month and more than 44 million workers have been laid off. When businesses have requested reimbursement of their business interruption losses from their insurers under business interruption policies, their insurers have denied the claims. The insurance industry also has announced that business interruption policies do not cover pandemic losses, so they intend to fight COVID-19 claims ‘tooth and nail.’ More than 450 lawsuits throughout the country already have been brought against insurers, including dozens of class actions. Legislators in several states have proposed legislation that would require insurers to pay business interruption claims regardless of whether the claims are covered by the wording of the policies. In the absence of a government bailout, the losers of this epic insurance battle—either insurers or their insureds’ businesses—will likely face bankruptcy. Thus, the financial consequences of this battle, and its implications for America’s economy, cannot be overstated.This is the first scholarly Essay to discuss the arguments for and against business interruption policies covering COVID-19 business interruption losses. In doing so, it sets forth the strongest arguments on each side of the fight regarding the meaning of the applicable policy language in the context of the existing caselaw and the purpose of business interruption insurance. It also addresses the insurance industry’s claim that pandemic losses are not covered by business interruption policies because such losses are simply uninsurable. Finally, it discusses the competing public policies that support each side.
French, Christopher C, ‘Federal Courts’ Recalcitrance in Refusing to Certify State Law COVID-19 Business Interruption Insurance Issues’ (2022) 100 Texas Law Review Online 152 -161 Abstract: Over 2,000 COVID-19 business interruption insurance cases have been filed in state and federal courts the past two years with most of the cases filed in or removed to federal courts. The cases are governed by state law. Rather than certify the novel state law issues presented in the cases to the respective state supreme courts that ultimately will determine the law applicable in the cases, each of the eight federal circuit courts to issue decisions on the merits in such cases to date has done so by making an Erie guess regarding how the controlling state supreme courts would decide the cases.This Essay argues the federal circuit courts’ decisions to make Erie guesses rather than certify the novel COVID-19 business interruption state law issues is a mistake that federal courts also have made in the past in regard to nationwide insurance coverage litigation governed by state laws. The Essay also argues that U.S. Supreme Court precedents regarding the abstention doctrine support state supreme court certification regarding the novel state law issues presented by COVID-19 business interruption insurance cases. Finally, the Essay discusses how early federal circuit court decisions on COVID-19 business interruption insurance claims are having a butterfly effect with respect to subsequent court decisions because other courts are relying upon, and adopting, the reasoning and holdings—right or wrong—of the federal circuit court decisions.
French, Christopher C, ‘Forum Shopping COVID-19 Business Interruption Insurance Claims’ [2020] University of Illinois Law Review Online 187–202 Abstract: Insurance disputes are typically governed by state law, and state insurance laws vary considerably, with some states being favorable to policyholders and others being unfavorable. With forum shopping, a plaintiff often has many choices regarding where it can bring a lawsuit, including multiple states in which to bring the case and whether to bring the case in federal or state court. Of the over 900 COVID-19 business interruption insurance lawsuits filed thus far, more than 600 of them have been filed in federal court, with more than 100 filed as class actions. Many of them were also filed in states with insurance laws that are not favorable to policyholders. Conventional wisdom provides that a plaintiff’s chances of winning are generally much higher in state court than in federal court and that historically federal class actions against insurers have been successful only approximately twenty-five percent of the time. So, why were so many of the COVID-19 business interruption insurance cases filed in federal court in unfavorable states and as class actions when the historical chances of winning are so low in such forums, particularly as class actions?This Essay provides some possible answers to that question. In doing so, it explores forum shopping considerations in general, the conventional wisdom regarding litigating in federal versus state court, and the empirical data regarding the odds of winning in state versus federal court.
Ghannam, Alaa, Ayman Sebae and Dina Makram-Ebeid, ‘Healthcare Protection Policies during the COVID-19 Pandemic: Lessons towards the Implementation of the New Egyptian Universal Health Insurance Law’ (American University in Cairo, Faculty Journal Articles, Social Protection in Egypt: Mitigating the Socio-Economic Effects of the COVID-19 Pandemic on Vulnerable Employment, 2021, 31 January 2021) Abstract: On March 11th 2020, the World Health Organization (WHO) declared the coronavirus a global pandemic. The spread of the virus in many countries has exceeded the capabilities of the traditional healthcare systems and has challenged government plans to contain it. The COVID-19 pandemic arrived in Egypt at a time when the first steps in the implementation of the newly ratified law on social health insurance were taking place. Law number 2 for the year 2018 saw the first steps of its implementation in Port Said governorate. As the realisation of the law is proceeding in other governorates, the pandemic and the policies it brought impacted the implementation process of the law. This paper attempts to provide an assessment of the policies taken to challenge the spread of the COVID-19 pandemic. It investigates the effects of the health system’s response to the pandemic on the implementation of the new health insurance law. The paper also aims at providing lessons from the management of the first phase of the pandemic, lessons that could be capitalized upon during the implementation of the health insurance law and in the health system reform in general. Understanding the effects of these policies and drawing lessons from the management of the first phase helps identify future challenges, opportunities and pitfalls in providing full comprehensive healthcare coverage for all Egyptians during the realization of this law. The paper draws its analysis, conclusions and recommendations from a number of sources including documentation of government policies towards the COVID-19 pandemic from January 7th 2020 until August 23rd 2020, desk review of data on the effects of these policies on disease morbidity and mortality, results of community assessments of healthcare services before, during and after the implementation of the new health insurance law in Port Said and input from key stakeholders. These key stakeholders include representatives at the different authorities in charge of the implementation of the new health insurance law and the COVID-19 response effort, service providers at different levels of healthcare service provision, service beneficiaries and service users and experts, policy makers and analysts. Based on the study’s findings, key recommendations are provided in managing the COVID-19 pandemic, implementation of the new health insurance law and beyond.
Giblett, Ray, Benjamin Kende and Timothy Chan, ‘Travel Insurance in the Time of COVID-19’ (2020) 36(1) Australian Insurance Law Bulletin 7–10 Abstract: As the coronavirus disease (COVID-19) outbreak evolves and travel restrictions remain in place for at least part of Australia’s winter, it has become abundantly clear that any plans Australians may have to enjoy a summer in Italy, Spain or England are quickly fading. In these uncertain and fluid times, travel insurers face increasing scrutiny from customers and regulators, with new policy sales grinding to a halt. It is an important time for insurers to assess their position and how they can best service their clients moving forward. In this article, we investigate how the travel industry is approaching cover for epidemics and pandemics, some potential coverage issues, and how travel insurers can use this time to regain consumer trust, following the Financial Services Royal Commission.
Goebel, Joseph, Kristopher J Kemper and Kevin Gatzlaff, ‘COVID-19 and CreditWatch List as an Economic Indicator’ [2022] Journal of Insurance Regulation Article 8 Abstract: A global pandemic interrupted a decade-long US expansionary cycle. While governments intervened in an attempt to manage a health crisis, the economy stalled, and equity markets crashed. However, equity markets quickly recovered and moved to positive territory a few months later. We examine the actions of Credit Rating Agencies (CRAs) and the signals that are sent through S&P Watch List activity. After creating a significant indicator based on Credit Watch activity, reflecting private firm information, we find that the swift recovery may have been foreseeable for non-insurance firms. The indicator provides less potential predictive power for insurance firms, either because the greater regulatory activity surrounding insurance firms yields less private information to be discovered by CRAs, or possibly because the insurance industry is more resilient to economic shock than other sectors of the economy.
Gürses, Özlem, ‘The Supreme Court on Business Interruption Insurance and COVID-19: Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1’ (2021) 32(1) King’s Law Journal 71–83 Abstract: From the early days of the first national lockdown in England, widespread concerns over many different types of insurance claims had been raised. The business interruption losses that the small businesses and enterprises suffered received particular attention and were covered broadly by the national media channels. The policy wordings in question were so varied that it was not possible for any party to provide a clear outcome that will have a widespread effect on such insurance claims. Through the Financial Conduct Authority’s involvement, the UK Supreme Court delivered a much-awaited judgment in a test case on the twenty-one selected policy wordings, fourteen of which were held to respond to the Covid-19 related business interruption claims. The significant impact of the test case, which prevented an ongoing uncertainty and avoided protracted litigation for many, is that many thousands of policyholders should now have their claims for business interruption losses paid.
Note: link to Financial Conduct Authority & Ors v Arch Insurance (UK) Ltd [2021] UKSC 1 on BAILII
Hermer, Laura D, ‘Skirting the Law: Medicaid Block Grants and Per-Capita Caps in a Pandemic’ (2021) St. Louis University Journal of Health Law and Policy (forthcoming) Abstract: To what extent can an administration abridge Medicaid’s entitlement status by administrative fiat? In the final year of the Trump administration, just before the COVID-19 pandemic, the Centers for Medicare and Medicaid Services (CMS) sought to push the outer bounds of this question by announcing the Healthy Adult Opportunity (HAO) initiative. It invited states to submit § 1115 demonstration applications to cover individuals not eligible for Medicaid benefits under the state’ s Medicaid plan—meaning, in many cases, the Affordable Care Act’s (ACA’s) Medicaid expansion population. Spending on those populations would be capped, not by purporting to waive federal law regarding matching payments under Medicaid—which would clearly exceed the government’s authority under § 1115(a)(1)—but rather through application of the demonstration’s budget neutrality limit. ‘Savings’—or the difference between the cap and actual state expenditures under the demonstration—could be used on a variety of otherwise non-matchable state projects. This Article traces some of the history of this maneuver, showing that the HAO misguidedly seeks to ‘return’ Medicaid to a program it has not been for decades. It furthermore argues that the Trump administration’s attempt to cap federal expenditures for certain Medicaid populations in exchange for certain state flexibilities is beyond the administration’s legal authority to grant. As this Article shows, the issue turns on how ‘individuals not eligible for benefits under the state plan’ are defined: Are they expansion populations considered to be ‘receiving medical assistance under a state plan approved under Title XIX,’ at least for the duration of the demonstration, and hence entitled to all the protections given to categorical and optional Medicaid populations covered under a state plan, or are they simply ‘regarded’ as such for the purpose of expenditures only, and not protections and privileges under the Medicaid statute? A careful reading of the statute, relevant regulations, and recent caselaw show that, at least in the case of the ACA’s Medicaid expansion population, the HAO initiative’s structure and suggested flexibilities do not comply with the law.
Hillier, Rachel, ‘The Legal Challenges of Insuring Against a Pandemic’ in María del Carmen Boado-Penas, Julia Eisenberg and Şule Şahin (eds), Pandemics: Insurance and Social Protection (Springer International Publishing, 2022) 267–286 Abstract: COVID-19 has raised, and continues to raise, questions about the traditional approach to insurance cover. For instance, business interruption insurance covering ‘pandemics’ under all risks insurance policies are likely to be a thing of the past. With tensions between businesses and the insurance industry on the rise, what can be done to offer businesses some protection at a premium they can afford, without emptying insurers’ reserves? In this chapter we talk about legal challenges related to traditional insurance against the risk of losses caused by a pandemic, and whether parametric insurance is the solution.
Huberfeld, Nicole and Sidney Watson, ‘Medicaid’s Vital Role in Addressing Health and Economic Emergencies’ in Scott Burris et al (eds), Assessing Legal Responses to COVID-19 (Public Health Law Watch, 2020) 103–109 Abstract: Medicaid plays an essential role in helping states respond to crises. Medicaid guarantees federal matching funds to states, which helps with unanticipated costs associated with public health emergencies, like COVID-19, and increases in enrollment that inevitably occur during times of economic downturn. Medicaid’s joint federal/state structure, called cooperative federalism, gives states significant flexibility within federal rules that allows states to streamline eligibility and expand benefits, which is especially important during emergencies. Federal emergency declarations give the secretary of Health and Human Services temporary authority to exercise regulatory flexibility to ensure that sufficient health care is available to meet the needs of those impacted. Under federal guidance, states have implemented a variety of options to respond to the COVID-19 pandemic. In addition, Congress enacted short-term legislative responses that increase federal funding for Medicaid and open new pathways for eligibility and payment for some COVID-19 testing. These responses have softened the double blow of the pandemic and its attendant recession, but more federal and state action is necessary. Congress should enact an increase in federal funding that lasts beyond the public health emergency to help states ride out the economic impact of the pandemic; provide extra funding to encourage states to adopt Medicaid expansion; offer states more funding for enrollment efforts to reach newly uninsured populations; and require state and local demographic data collection as a condition of federal funding to inform evidence-based public health efforts. State governments should use all available emergency flexibility options to streamline application and enrollment processes and take advantage of increased federal funding possibilities.
Johnson, James A, ‘A Primer on COVID-19 and Insurance’ (2022) 49(1) New York State Bar Association, Torts, Insurance & Compensation Law Section Journal (pre-published version published on SSRN 11 May 2022) Abstract: The ongoing coronaviris (COVID-19) pandemic and varients is the most devastating and disruptive forces in recent history. The Covid-19 pandemic will lead to numerous lawsuits involving insurance coverage and commercial disputes. A party whose operations are compromised by the pandemic may have defenses such as impossibility and force majeure. However, the consensus or majority of cases hold that a loss or damage must be caused by a direct and tangible physical injury to the insured property. In most jurisdictions physical loss does not cover a virus because a virus does not result in tangible damage to property. Notwithstanding an argument can be made that the words physical loss could include a business’s inability to use the property during the pandemic. To help mitigate the financial crisis created by the Covid-19 pandemic, the federal government has issued guidance relating to employee benefit plan operation and administration. The Coronavirus Aid Relief & Economic Security Act (CARES) provides for substantial financial and administrative relief to participants, sponsors and administrators of certain employee benefit plans. The IRS has clarified and expanded upon the relief offered in the new law.
Knutsen, Erik S, ‘The COVID-19 Pandemic and Insurance Coverage for Business Interruption in Canada’ (2021) 46(2) Queen’s Law Journal 431–444 Abstract: This article explores the impact of the COVID-19 pandemic on the insurance industry and analyzes whether most Canadian businesses are insured for business interruptions and losses caused by the pandemic. The author suggests that pandemic-related losses are insurable. Insurers have had sufficient time and experience to prepare and model their policies to account for events such as the COVID-19 pandemic. Insurance policies typically protect against risks which are triggered only where a business suffers ‘direct physical loss of, or damage to’ property. Ultimately, whether Canadian businesses are insured against COVID-19 business interruptions will depend on how the courts interpret ‘direct physical loss of, or damage to, property’ in the context of pandemic-related losses. The author cautions against engaging in a literalist or dictionary-focused interpretation of insurance policies. Instead, the author argues that equitable and predictable insurance coverage determinations requires a contextual assessment grounded in the role of insurance as a risk-based financial instrument.
Listio, Ronald and Faisal Santiago, ‘Analysis of the Role of Insurance Law of the Impact of the Covid-19 Pandemic for Indonesian Community Insurance’ (Proceedings of the 1st International Conference on Law, Social Science, Economics, and Education, ICLSSEE 2021, March 6th 2021, Jakarta, Indonesia, 2021) Abstract: Insurance is something that is often discussed today in people’s lives. The problems that will be discussed in this study are the public lack of understanding of insurance laws, inefficient or late payment claims processes, rejected insurance claims, unaffordable premiums for the lower middle class, and the causes of premium income to decline due to the Covid-pandemic. 19, weak regulatory oversight. The purpose of this study is to clarify the definition of insurance law, the selection of the right insurance, the rights of customer claims are regulated by the Financial Services Authority Rule, the customer understands insurance law regarding rejected claims, the role of a firm regulator in evaluating and supervising and overcoming problems in the insurance industry for legal protection. for the community. The method used in this research is qualitative research methods. The procedures for data collection in the form of interviews, data from field observations, analysis sourced from books. The results of this study indicate the insurance laws that govern the insurance industry in Indonesian society. Customer relationships with insurance companies are regulated by statutory regulations. Firmness of regulators in handling problems in insurance. The existence of insurance law must be understood and obeyed by the insurance company and the customer as well as the regulator must be able to be firm in carrying out its duties.
Longley, Nick, ‘COVID-19 and the Concept of Damage for Construction Insurance Claims’ (2020) 36(1) Australian Insurance Law Bulletin 11–14 Abstract: This article considers to what extent an outbreak of COVID-19 on a construction site will impact on any construction insurance contracts. It will specifically consider to what extent the presence of COVID-19 on site can be considered damage for the purposes of the material damage section of a contract works insurance contract.
Meggitt, Gary, ‘Business Not as Usual: The Financial Conduct Authority v Arch Insurance (UK) Ltd’ [2022] (4) Journal of Business Law 257-281 Abstract: The UK Supreme Court’s decision in The Financial Conduct Authority (FCA) v Arch and Others is of considerable significance. It is arguably the leading authority, not just in the UK but elsewhere in the common law world, on the response of business interruption insurance (BII) policies to claims arising from the COVID-19 pandemic. This article explains the nature of BII policies and the law in England & Wales prior to the decision in FCA v Arch. It then examines the Supreme Court’s decision in detail before reflecting on its wider implications for policyholders, insurers and others.
Muñoz Paredes, María Luisa and Anna Tarasiuk (eds), Covid-19 and Insurance (Springer, 2023)Link to book page on publisher website
Contents:
- Sara Landini and Kyriaki Noussia, ‘Insurance Developments in the Light of the Occurrence of the COVID-19 Pandemic’ 1-16
- Robert H Jerry II, ‘Understanding Parametric Insurance: A Potential Tool to Help Manage Pandemic Risk’ 17-62
- María Luisa Muñoz Paredes, ‘Business Interruption Insurance and COVID-19: A Critical Analysis of the Jurisprudence and the Response of the Spanish Insurance Sector’ 63-106
- Jeffrey E Thomas, ‘COVID-19 and Business Interruption Coverage in the United States: An Example of Judicial Regulation’ 107-134
- Erik S Knutsen and Jeffrey W Stempel, ‘American Exceptionalism: The COVID-19 Insurance Experience’ 135-158
- Jens Gal, ‘Business as (Un-) Usual’ 159-184
- Martín G Argañaraz Luque, Sebastian Bonina and Anthony Charles de Novaes da Silva, ‘Impact of COVID-19 on the Latin American Insurance and Reinsurance Market’ 185-217
- Alkistis Christofilou et al, ‘COVID-19 Treatment Refusal: Medical Liability Insurance in Greece in Light of the Oviedo Convention’ 219-249
- Anna Tarasiuk and Bartosz Wojno, ‘The Influence of Covid-19 on Life Insurance: Polish Market Perspective’ 251-270
- Covadonga Díaz Llavona, ‘Impact of Covid-19 on Travel and Health Insurance’ 271-299
- Katica Tomic, ‘The Impact of the Covid-19 Pandemic on the Sports Industry and Sports Insurance: Case of Novak Djokovic and Australian Open Tennis Tournament 2022’ 301-320
- Waldo Sobrino, ‘Directors and Officers Insurance and COVID-19: Future Exclusions with Retroactive Application’ 321-343
Abstract: The outbreak of corona virus (COVID-19) pandemic has no doubt, occasioned an unprecedented global human and economic crisis. The resultant lockdown and abrupt shutdown of major economic activities in the world have apparently given rise to several business disruptions and economic losses across the world including Nigeria. According to Kristalina Georgieva, Managing Director of International Monetary Fund (IMF), the economic effect of the pandemic would result in ‘a recession at least as bad as during the Global Financial Crisis or worse’, and this is because the world is currently experiencing the most difficult economic situation since World War-II. The consequence of the foregoing crisis is that many organizations would be seeking for ways to ameliorate the effect of the pandemic on their businesses. One of the options open to some businesses is to have recourse to their insurance policies, and the most significant insurance coverage which business owners would resort to, is the business interruption insurance coverage. This write up examines the concept of business interruption coverage; the extent which such insurance claims may be potent for the insured business owners in the face of the recent pandemic, and the extent of its viability in the light of the Nigerian insurance legal framework.
Nousia, K, ‘The Covid-19 Pandemic: Contract and Insurance Law Implications’ (2020) 35(7) Journal of International Banking Law and Regulation 274–283 Abstract: The spread of COVID-19 has had a global impact, with the human toll being significant, and with the economic cost being unquantifiable. With regards to business and contractual relationships, legal liabilities owed to disruption, cancellations, or to the imposed halt of everyday life are perhaps the most notable. This article starts by examining frustration in English, US and continental contract law in relation to cases where the circumstances have changed due to unnatural events such as the ongoing COVID-19 pandemic. It then moves on to discuss the impact of Covid-19 on insurance, in particular business interruption, travel and general liability insurance. The likelihood of success of future claims, the scope of coverage, together with the meaning and interpretation of the term ‘force majeure’ and how this will relate to exclusions from insurance coverage is discussed. Valuations methods are also considered and evaluated with a view to protect the policyholder as his business interruption policy is a contract of adhesion not having left him any room to negotiate. In addition, possible interpretations to be followed by courts in future claims and liability for catastrophic risks and methods of compensation are examined and conclusions on the role of insurance in the COVID19 pandemic are drawn.
Onyediri, Jason, ‘Social Insurance for the Socially Distant: Reforming the Countermeasures Injury Compensation Program’ (2022) 101(1) Texas Law Review 237–271 Abstract: The various COVID-19 vaccines have done immeasurable good for society. The vaccines have slowed the spread of the virus, reduced hospitalization rates, and prevented deaths. Of course, the vaccines are not perfect. Of the hundreds of millions of people who have been vaccinated, some, albeit relatively few, have suffered serious adverse side effects from vaccination. How these individuals are compensated has significant implications for the nation’s vaccination efforts and public health. Pursuant to the Public Readiness and Emergency Preparedness Act (PREP Act), broad liability protections are afforded to manufacturers and administrators of COVID-19 vaccines. Thus, those that allege harm from vaccines cannot bring suit to recover damages for their injuries. At present, the Countermeasure Injury Compensation Program (CICP) is the exclusive mechanism by which individuals injured by COVID-19 vaccines can seek compensation. However, the CICP was not designed with COVID-19 in mind. The program is woefully deficient, particularly when compared to its sister federal vaccine injury program, the Vaccine Injury Compensation Program (VICP). Moreover, other social insurance programs employ successful design principles that are lacking in the CICP. This Note argues that the CICP is best conceptualized as social insurance and draws from successful social insurance programs to suggest reforms to the CICP. Others have critiqued the CICP, compared it to the VICP, and proposed reforms. However, this Note is unique in developing its reform suggestions by viewing the CICP through the lens of social insurance. In doing so, this Note seeks to inform the current federal vaccine injury compensation reform discourse by extracting valuable design principles from social insurance programs.
Pareja, Mary Leto, ‘Masking Vulnerability: Including PPE as a Covered Service in Health Insurance’ (2023) 102(2) Nebraska Law Review 389–429 Abstract: The COVID-19 pandemic laid bare the shared vulnerability inherent in the human condition, prompting a collective recognition of our physical susceptibility to infectious diseases. While great strides have been made in combating COVID-19 through vaccinations and treatments, a portion of the population remains profoundly vulnerable due to health conditions that make the disease more dangerous, that limit vaccine efficacy, or that prevent vaccination altogether. This article explores a path forward by proposing a solution within health benefit plans—encompassing both private health insurance and public health benefits. Specifically, the article advocates for a coverage mandate for over-the-counter personal protective equipment (PPE) at zero out-of-pocket cost for vulnerable individuals. Drawing on the experiences of those facing heightened susceptibility, such as immunocompromised patients undergoing chemotherapy, the article highlights the critical role of PPE in safeguarding against infectious diseases. The article proceeds with a comprehensive exploration, beginning with a background on infectious diseases and the context of COVID-19. It then scrutinizes the current landscape of health benefit plans and their coverage of personal protective equipment. The proposal is systematically presented, detailing how a mandate can be structured to implement comprehensive coverage and including an exploration of different design elements that could be utilized to broaden or narrow the coverage mandate. The article advocates for a paradigm shift in health benefit plans to address the ongoing vulnerability faced by a segment of the population. By mandating zero out-of-pocket costs for PPE, this proposal aims to empower vulnerable individuals to protect themselves against infectious diseases. In doing so, it seeks to bridge the gap in current health coverage and foster a more inclusive and resilient healthcare system in the post-pandemic era.
Peters, Philip Jr, ‘On the Cusp of the Next Medical Malpractice Insurance Crisis’ (University of Missouri School of Law Legal Studies Research Paper No 2021–07, 9 May 2021) Abstract: Medical malpractice claims are dwindling. Total payouts are far lower than during the 2002 crisis. Yet, insurance industry profits have been sinking for a decade and are nearly in the red. After a dozen years with a ‘soft’ insurance market, we are now on the cusp of yet another malpractice insurance crisis. How can profits be in peril if claims have dwindled and payouts are historically low? Answering that question requires an understanding of the insurance cycle. The cycle periodically transforms gradual increases in costs and gradual decreases in revenue into explosive increases in premiums. The industry’s financial statistics today eerily resemble those leading into the 2002 crisis. However, some important differences also exist. Perhaps most importantly, the coronavirus pandemic introduces a variable that makes the current transition from a soft market to a hard one unique. In addition, industry representatives have recognized the signs of a hardening market earlier in the transition than they have in the past and that may enable them to engineer a less painful transition from a soft market to a hard one. The stakes are high. After each of the three prior crises, physicians, hospitals, and insurers descended on state capitals and lawmakers responded with waves of restrictive tort reform. This Article explains how we have come to sit on the cusp of a fourth medical malpractice crisis and examines the factors that will determine how soft our landing will be.
Primorac, Željka, ‘COVID - 19 as a “Significant Circumstance” for Risk Assessment in Life Insurance (in and After the Pandemic)’ (2021) 5(EU 2021 – The Future of the EU in and After the Pandemic) EU and Comparative Law Issues and Challenges Series (ECLIC) 359–378 Abstract: The data on the health status of a policyholder represent a significant circumstance for risk assessment and concluding a life insurance contract, and are also legally relevant circumstances for exercising the rights from that contract. The author starts from a theoretical analysis of the perception of data on the health status of policyholders as personal data, comparing the right to confidentiality of such data with the duty to report them (before concluding a life insurance contract) in terms of reporting all circumstances relevant to the insurance risk assessment. In order to properly fulfil the obligation of pre-contractual nature, the paper analyses the legal norms governing this issue and also provides a comparative overview of the Croatian and German insurance legislation with special emphasis on the scope of health data that the insurer is authorised to require, the clarity of legal standards and legal insurance norms contained in the insurance questionnaires and the life insurance offer. Presenting the importance of COVID-19 infection and possible chronic consequences for human health, the author indicates the extent to which COVID-19 infection (mild or severe form of disease, possible need for hospital treatment) will have an impact on the design of new insurance questionnaires and the relevance of genetic testing results in the context of concluding future life insurance contracts.
Puławska, Karolina, ‘Impact of the COVID-19 Pandemic on Insurance Companies in Europe: First Signals’ (SSRN Scholarly Paper ID 3708992, 10 October 2020) Abstract: Action to prevent the spread of the Coronavirus Disease 2019 has been taken internationally. Service companies have been restricted, and a number of sports and cultural events have been postponed or canceled. As a result, the current pandemic has led to global socio-economic disruption. The current economic situation, caused by the pandemic, might significantly affect the functioning of insurance companies in Europe, as the insurance companies are in the delicate position of balancing a claims load with their capital and solvency stability. In this study, we evaluate the effects of the CoronaCrisis on the insurance companies. We use financial statements of insurance companies comprising European insurance companies during 2010-2020. The results unambiguously demonstrate that CoronaCrisis negatively affects the insurance sector’s stability. However, we do not see the effect of CoronaCrisis on the Z-Score ratio. Moreover, our estimation results demonstrate that the CoronaCrisis increase the value of receivables owed to the insurance companies. Therefore, in light of the above, European legislators should discuss how to manage probable financial problems of insurance companies. A lack of proper management would certainly endanger the customers’ safety and stability of the sector. Therefore, we confirm that government interventions in European countries needed to prevent the insurance sector from collapse.
Rosenbaum, Sara and Morgan Handley, ‘Caring for the Uninsured in a Pandemic Era’ in Scott Burris et al (eds), Assessing Legal Responses to COVID-19 (Public Health Law Watch, 2020) 110–116 Abstract: On the eve of the COVID-19 pandemic, millions of Americans were uninsured despite a booming economy and a decade of health reform. The pandemic and its associated job losses have significantly increased the number of uninsured Americans – predominantly low-income, working-age adults and their families. Underlying drivers are the pandemic-triggered economic crisis, the inherent limits of the Affordable Care Act (ACA), the 2012 United States Supreme Court’s ruling on the constitutionality of its nationwide Medicaid expansion, and policies pursued by the Trump administration and certain states that further restrict the ACA’s reach. Especially serious during a public health emergency, the uninsured are significantly less likely to receive necessary care and are more likely to forgo care because of cost. Health care safety net providers established and operated under federal, state, and local law offer vital care for the uninsured and medically underserved rural and urban populations and communities. Federal COVID-19 legislation enacted to date appropriates funding to directly support health care providers, but the administration’s implementation approach may be limiting the effectiveness of this funding for the highest-need populations and communities. Beyond reforms aimed at improving how federally appropriated emergency health care funding is spent, states should use Medicaid to foster greater safety net provider stability and should pursue policies that promote accountability by tax-exempt hospitals with charity care obligations.
Schwarcz, Daniel, ‘Redesigning Widespread Insurance Coverage Disputes: A Case Study of the British and American Approaches to Pandemic Business Interruption Coverage’ [2021] DePaul Law Review (forthcoming) Abstract: In the 18 months since the pandemic’s onset in March 2020, businesses have filed approximately 2,000 different lawsuits in state and federal courts seeking insurance coverage under their business interruption policies. Notwithstanding this ‘nationwide flood of insurance-related litigation,’ clear answers regarding insurers’ coverage obligations remain elusive: although courts have dismissed many of these cases, policyholders have scored a meaningful number of victories in federal, and especially state, courts. The United States’ chaotic and costly process for resolving pandemic-related business interruption coverage disputes contrasts sharply with the experience of the United Kingdom. Within eight months of the pandemic’s onset, the legal obligations of British business interruption insurers had been definitively resolved through a novel ‘test case scheme’ led by the country’s primary market conduct regulator for financial firms, the Financial Conduct Authority (FCA). Focusing on these divergent experiences, this Article suggests that the U.S. can substantially improve its process for resolving future widespread insurance coverage disputes by adopting a limited reform that is inspired by the British test case scheme. In particular, the Article proposes that states should consider empowering their insurance department and attorney general to request that federal courts adjudicating cases raising novel coverage questions implicated in emerging and widespread coverage disputes certify those questions to the state’s supreme court.
Scott, Rob and Zara Sher, ‘South Africa : COVID-19 Related Insurance Claims and Coverage’ (2020) 20(6) Without Prejudice 21–23 Abstract: The outbreak of the coronavirus (COVID-19) pandemic has raised many questions around insurance coverage with regard to COVID-19 related losses, exposures and liabilities.
Seta, Makoto, ‘Compulsory Insurance for Cruise Vessels as a Preparation for the next Pandemic: Law of the Sea Perspective’ (2023) 152 Marine Policy Article 105586 Abstract: During the COVID-19 pandemic, many port states faced difficulty when cruise vessels with COVID-19 patients tried to dock at their ports. Although they are basically not obliged to accept such vessels under international law, they cannot easily deny access because the refusal would be viewed as a lack of humanitarian consideration. On the other hand, accepting such vessels leads to the risk of exposing their own nationals to COVID-19 and incurring the financial cost of medical treatment for cruise passengers. In fact, in the cases of Diamond Princess, Costa Atlantica, and Zaandam and Rotterdam, the question of who should take on the financial burden for medical costs of crews and passengers on board these vessels was debated. The current international legal framework does not provide any answer to this question, and therefore, a new framework is needed. If the new framework allocates the economic burden to ensure the provision of tests and medical care so that an intolerably heavy burden is not imposed on port states, they will be more welcoming to cruise vessels with infected people. Such allocation could be realized by requesting that carriers provide a compulsory insurance system for medical care in a pandemic.
Tereszkiewicz, Piotr, ‘Business Interruption Insurance and Covid-19: Between Embracing Risk and Spreading Loss’ in Klaus Mathis and Avishalom Tor (eds), Law and Economics of the Coronavirus Crisis (Springer, 2022) 215–235 Abstract: This paper seeks to demonstrate one of several ways in which insurance contract law may approach the allocation of pandemic-related risks and losses. Specifically, the paper shows how business interruption insurance policies turn out to be a private-market tool of loss spreading. The recent judgment of the UK Supreme Court, Financial Conduct Authority v. Arch Insurance (UK) Ltd [2021] UKSC 1, is discussed as an example of how courts weigh different considerations in determining whether cover under business interruption policies should be granted. The paper puts the judicial analysis of business insurance policies against the background of the theoretical discussion on the limits of embracing risks by those harmed as opposed to spreading risk in society by means of insurance contracts.
Terracall, Lucy and Claire Gomo, ‘Test Cases to Consider COVID-19-Related Business Interruption Insurance Coverage’ (2020) 24(3) Inhouse Counsel 35–36 Abstract: Test cases in both the United Kingdom and Australia will provide clarity as to whether there is coverage for business interruption consequent upon COVID-19. However, given that such guidance may be some time away, this article outlines some of the key steps in-house counsel should take now to preserve a potential insurance entitlement.
Vella, Marcus, ‘Travel Insurance Claims during Covid-19: An Insurance Lawyer’s Guide’ (2022) 44(5) Bulletin (Law Society of South Australia) 6–7 Abstract: So the world is opening up again. After months of late nights working from home, dialling into court hearings at the breakfast table, and swearing affidavits over Zoom, perhaps, like me, you are now finally daring enough to swap your top-half-only suit and curated video-call background for a comfy pair of travel pants, to jet off far and wide across Australia or further abroad.
Walpole, Samuel and William Isdale, ‘Business Interruption Insurance and the COVID-19 Pandemic’ (2020) 49(1) Australian Business Law Review 73–77 Abstract: The extent to which business interruption insurance policies respond to the disruption wrought by the COVID-19 pandemic has emerged as a significant legal issue in Australia and overseas. In the first Australian test case – HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296 – a five-judge bench of the New South Wales Court of Appeal addressed the fact that many Australian policies contain exclusions from cover framed around reference to the now-repealed Quarantine Act 1908 (Cth), which has been replaced by the Biosecurity Act 2015 (Cth). This note highlights key aspects of the reasoning of the members of the Court of Appeal and considers the lessons that emerge from the decision.
Wantoch-Rekowski, Jacek and Martyna Wilmanowicz-Słupczewska, ‘Emergency Legislative Measures on Social Insurance Contributions and the COVID19 Pandemic’ in Frydrych-Depka, Anna, Maciej Serowaniec and Zbigniew Witkowski (eds), Pandemic Poland: Impacts of Covid-19 on Polish Law (Vandenhoeck & Ruprecht, 2021) 183 Abstract: Between March and May 2020, the legislator adopted emergency legislative measures designed to “shield“ business operators from the adverse effects of the COVID-19 pandemic. In addressing the matter of social insurance contributions payments, the legislator did not use the then-existing legal framework and introduced new solutions, hitherto unknown to the social insurance system. This paper presents the law enacted to serve as relief measures related to the payment of contributions. The paper also includes a critical analysis of the new measures and a proposal of a model legislative reform in this area.
Weeks, Elizabeth, ‘Private Insurance Limits and Responses’ in Scott Burris et al (eds), Assessing Legal Responses to COVID-19 (Public Health Law Watch, 2020) 95–102 Abstract: The COVID-19 pandemic exposed a number of existing flaws in the United States’ patchwork approach to paying for and providing access to medical care. Shelter-in-place orders, social distancing, and other public health strategies employed to address the pandemic spawned a global recession, causing rapid and high unemployment rates in many countries. The U.S. unemployment rate peaked in April 2020 at 14.7%, higher than in any previous period since World War II. The United States has long hewed an anachronistic policy of relying heavily on private employers to provide health insurance to a substantial portion of the population. Those who are not eligible for employer-sponsored insurance (ESI) must fend for themselves in the non-group market, unless they qualify for government-sponsored insurance or safety net programs. Companion Chapters in this volume describe the COVID-related challenges for Medicaid and the uninsured, while this Chapter focuses on the private insurance market. The Patient Protection and Affordable Care Act of 2010 (ACA) dramatically overhauled health insurance in the United States. But those reforms have been under continuous threat of dilution or wholesale repeal, including a case currently pending before the U.S. Supreme Court that could strike down the entire Act. Thus, any evaluation of the benefits or demerits of the private insurance market must be read against the possibility that existing consumer protections could be eliminated with the stroke of a pen.
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