This endorsement modifies insurance provided under the following:
COMMERCIAL PROPERTY COVERAGE PART
STANDARD PROPERTY POLICY
A. The exclusion set forth in Paragraph B. applies to
all coverage under all forms and endorsements
that comprise this Coverage Part or Policy, including
but not limited to forms or endorsements that
cover property damage to buildings or personal
property and forms or endorsements that cover
business income, extra expense or action of civil
authority.
B. We will not pay for loss or damage caused by or
resulting from any virus, bacterium or other microorganism
that induces or is capable of inducing
physical distress, illness or disease.
This is the standard ISO exclusion. It is not “hidden” and it does not contain any esoteric language. It plainly states losses due to a virus, including business interruption in general and those due to civil authority, are excluded. The lawyers who file these suits should have to reimburse the insurers for all legal fees and costs involved in defending them. They are frivolous.
The ISO exclusion has been a mandatory exclusion since 2006. I think the lawyers are just saying the exclusions are weak or non-existent in an effort to try to gain more clients. If the exclusion issue were more concrete and affirmatively sufficient to deny the claim early on, there’d be no more clients for the lawyers. The lawyers are lying if they say they think they have a case. These claims are excluded, period.
What is also of concern are the states who have proposed legislation to “force” insurers to pay shuttered businesses for business interruption due to COVID 19. While this does not appear to be constitutional, it is still concerning.
I’m not sure why it makes sense to consolidate these cases. Each insurance policy will be interpreted under the law of the state in which the policy was issued or the subject property was located. So if 50 states’ laws apply, why would you ask one judge to become familiar with all of them. Let the judges who probably grew up in the specific state law handle each. They can all consolidate at the Supreme Court.
They want to consolidate them because it means they have a larger hammer with which to try to pound the insurers into a settlement under the theory that its cheaper to settle than for insurers to continue to pay litigation costs. It’ll be easier for the lawyers to say settle for X amount rather than spend Y amount to try to win. These cases have been taken on contingency fee arrangements and by grouping them they think they can try to get the insurer to pay a settlement and collect their cut than if insurers felt they could win.
-The intent to exclude the peril (virus / communicable diseases, etc.) is clear
-The insureds need business interruption
-We don’t want to “break” insurance contracts retroactively due to long term affects on
doing business
-Having professional adjuster’s process business income payments to businesses who
selected the coverage in their program will help our economy recover in the long-run.
The Federal government should step-in and ask the carriers to treat the business income question as if it was “a fire or other covered peril” … the Fed’s should be the 100% reinsurer in this case (just like terrorism). Then create a catastrophic fund much like terrorism fund.
The time and long term affects of litigation for both the plaintiffs and the carriers will be a net negative for both… and I doubt it will help the businesses that really need it or our country.
Granted it has been a while since I read the standard policies in question, but don’t they all include an arbitration clause? The policies I negotiated were all manuscripted due to the high deductible levels. All were exempt from state mandated language.
Seems crystal clear to me:
EXCLUSION OF LOSS DUE TO VIRUS OR BACTERIA
This endorsement modifies insurance provided under the following:
COMMERCIAL PROPERTY COVERAGE PART
STANDARD PROPERTY POLICY
A. The exclusion set forth in Paragraph B. applies to
all coverage under all forms and endorsements
that comprise this Coverage Part or Policy, including
but not limited to forms or endorsements that
cover property damage to buildings or personal
property and forms or endorsements that cover
business income, extra expense or action of civil
authority.
B. We will not pay for loss or damage caused by or
resulting from any virus, bacterium or other microorganism
that induces or is capable of inducing
physical distress, illness or disease.
This is the standard ISO exclusion. It is not “hidden” and it does not contain any esoteric language. It plainly states losses due to a virus, including business interruption in general and those due to civil authority, are excluded. The lawyers who file these suits should have to reimburse the insurers for all legal fees and costs involved in defending them. They are frivolous.
The ISO exclusion has been a mandatory exclusion since 2006. I think the lawyers are just saying the exclusions are weak or non-existent in an effort to try to gain more clients. If the exclusion issue were more concrete and affirmatively sufficient to deny the claim early on, there’d be no more clients for the lawyers. The lawyers are lying if they say they think they have a case. These claims are excluded, period.
What is also of concern are the states who have proposed legislation to “force” insurers to pay shuttered businesses for business interruption due to COVID 19. While this does not appear to be constitutional, it is still concerning.
I’m not sure why it makes sense to consolidate these cases. Each insurance policy will be interpreted under the law of the state in which the policy was issued or the subject property was located. So if 50 states’ laws apply, why would you ask one judge to become familiar with all of them. Let the judges who probably grew up in the specific state law handle each. They can all consolidate at the Supreme Court.
They want to consolidate them because it means they have a larger hammer with which to try to pound the insurers into a settlement under the theory that its cheaper to settle than for insurers to continue to pay litigation costs. It’ll be easier for the lawyers to say settle for X amount rather than spend Y amount to try to win. These cases have been taken on contingency fee arrangements and by grouping them they think they can try to get the insurer to pay a settlement and collect their cut than if insurers felt they could win.
The real question is why have litigation?
-The intent to exclude the peril (virus / communicable diseases, etc.) is clear
-The insureds need business interruption
-We don’t want to “break” insurance contracts retroactively due to long term affects on
doing business
-Having professional adjuster’s process business income payments to businesses who
selected the coverage in their program will help our economy recover in the long-run.
The Federal government should step-in and ask the carriers to treat the business income question as if it was “a fire or other covered peril” … the Fed’s should be the 100% reinsurer in this case (just like terrorism). Then create a catastrophic fund much like terrorism fund.
The time and long term affects of litigation for both the plaintiffs and the carriers will be a net negative for both… and I doubt it will help the businesses that really need it or our country.
Granted it has been a while since I read the standard policies in question, but don’t they all include an arbitration clause? The policies I negotiated were all manuscripted due to the high deductible levels. All were exempt from state mandated language.