D.C. Judge Rules For Insurer, Dismisses Restaurants’ Business Interruption Claims
By Andrew G. Simpson | August 7, 2020
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Good news for the industry!
Good news for the cost of insurance products. These types of ruling preserve the pricing mechanism of coverages.
Of course, Plaintiff’s bar only needs one victory, in court, to vastly expand their revenue stream.
Precedent upon precedent has already been set on this prior to Covid. Business Interruption doesn’t apply when there’s no physical damage. A surface can be cleaned of a virus, thus no physical damage exists. Any court that rules otherwise is undermining the integrity of the underwriting process and risk that carriers take.
Just goes to illustrate how important one or more modifying words can be in an insurance contract. I’m sure no one feels “good” about this. No doubt further legislation and perhaps new policy language will be considered going forward.
I don’t doubt legislation will be attempted to force carriers to cover these types of losses. I hope those that push that understand the cost of such coverage. It is not far-fetched to estimate the cost of an average BOP would increase ten times or more if coverage is mandated. And then what business can afford that? Solution may be to offer the coverage at the price needed and a business can then choose whether they want coverage. The other solution is a federal government backed policy like Flood.
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No, I don’t agree that the technician’s finger was physical damage. I would say that loss was a cyber claim.
It was opened as a software claim.. No such thing back 7 or more years ago as cyber claim. Big difference in what you mention.
Cyber insurance policies generally do not cover: Potential future lost profits. Loss of value due to theft of your Intellectual Property. Betterment: the cost to improve internal technology systems, including any software or security upgrades after a cyber event.
Also, she was not seeking loss of revenue.. She was seeking the cost of recovery of software. it’s expensive in a Doctors office to do so.
Cyber insurance was normally sold as specialty. A large provider of insurance to Dcctors offices didn’t have Cyber in those days in the Gl and Bop policy.
If the doctor wanted coverage for computer systems, they should have purchased the specialty coverage. There were those type of policies 7 years ago, in addition to doctor offices largely still have paper copies of their client files. This sounds like it should have been a liability claim against the company they hired to do the computer work. If they were doing their own programming, well, this is what happens.
It was subrogated and the carrier would not talk to me any more on this case even though I had a contract with them. I inherited this case and fought the carrier that I have been doing business with, for at the time, 25 years, and the client was not mine. She is now and she is with a different carrier because I seemed to have scared the carrier enough to re open the claim. Her other agent was useless. I got a lot of referral business for going the extra mile for them. I did attend law school and I have been doing this for 33 years. The carrier in question lost far more than $350,000 in the business I took away from them. Good news travels fast but bad news can put you out of business. I wrote over 4 million in referrals and it’s still going. I just think they did not want to face a jury on this one and they thought she would lay down. She did lay down until I met her and thought it was wrong. It was as simple as that.
Just like they sometimes deny claims that are covered, insurers sometimes pay claims that aren’t covered. The “finger” is not the loss or damage. At best, it is a cause of loss. The damage or loss was to the data, not the finger.
The finger was the tornado which touched the wrong key where all the information was lost. The Tech hit the wrong key..
I cannot believe they paid that under the highly questionable presumption that a “finger stroke” constituted “direct physical loss.” Amazing.
If you think as a Jurist it makes sense. If I poke you in the eye with my finger and cause your eye to bleed, you have direct physical loss perpetrated by my finger. You miss work, you have pain and suffering, and you accrue medical bills. I do not see the argument against it…
A computer keyboard is not an eyeball. Apples and oranges. If this were the case, I just caused direct physical loss for every letter I typed in this reply. Your argument is not at all logical.
what do you think Libel and Slander is? Write it and see how fast you get a suit. The ink does not cause the loss. Your frame of mind does, written by your hand that brought the thought to paper. Your internal thoughts are fine but you put them on paper. Once again, you need to think like a Jurist.
Did you learn something?
Just to let you know I am taking early tuition for class if your interested.
Go after the mayor and/or city in civil court for damages . . . . . hold those that make the decisions accountable.
Good thing. People don’t understand pricing repercussions down the road on this stuff. If an insurance company were to pay these claims (say coverage was offered and purchased), you’d like see a scenario where insurance companies were being bailed out. Either way, government pays.
A company CAN’T pay these claims because there are far too many. If insurers began paying COVID BI claims, it would bankrupt the entire industry in less than two months. Then there would be NO industry for all the rest of the claims.
In the policy it stated that a lose of business was due to action of civil authority or government decisions. This appears to be a reasonable assumption by the insured facility. It even stated that the coverage would be on profit not gross.
Even those coverages, “civil authority or government decisions” have to be the result of physical damage. There is no coverage (in all but a handful of policies) without COVERED Physical Damage. So if the proximate cause is excluded, flood, earthquake, etc. then the Business Interruption is also excluded.
Even those coverages, “civil authority or government decisions” have to be the result of physical damage. There is no coverage (in all but a handful of policies) without COVERED Physical Damage. So if the proximate cause is excluded, flood, earthquake, etc. then the Business Interruption is also excluded.