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Did a Main Insurer Admit in Its Claims Guide Coding That Covid-19 Causes Bodily Loss? | Property Insurance coverage Protection Legislation Weblog

One of many craziest chapters ever written relating to insurance coverage litigation includes Covid-19 first-party insurance coverage circumstances. 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 sort of state of affairs could be coated with no particular exclusion. 

A movement filed final week involving Affilated FM exhibits how some insurers arrange claims processes designating Covid-19 losses as a “bodily loss.”1 A on line casino in Las Vegas argued the next in a movement it filed final week:

AFM instructed the Court docket that proof didn’t exist when that proof not solely did exist however immediately contradicted AFM’s central positions on this case. AFM asserts {that a} communicable illness can not trigger bodily loss or harm. This can’t be squared with AFM’s claims guide, which incorporates Loss Code 60, protecting ‘Bodily loss or harm which ends from the precise presence of a communicable illness and the related enterprise interruption as outlined within the coverage.’ E mail 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 commonplace 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 not trigger bodily loss or harm, however its claims guide contradicts that assertion. Loss Code 60 explicitly states {that a} communicable illness could cause bodily loss or harm. That’s precisely what Treasure Island has asserted. Some communicable ailments, comparable to AIDS, don’t trigger bodily loss or harm to property as a result of they don’t use property as a transmission mechanism. Others, comparable to COVID-19, could cause bodily loss or harm to property as a result of they do use property as a transmission mechanism. Whether or not 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 frequent chilly. The extent and period of the affect and harm is a matter of the quantum of damages, not the set off of protection. Treasure Island’s professional Dr. Joseph Lewnard will testify to precisely this.

The issue for policyholders is that the overwhelming majority of judges have dominated that Covid-19 didn’t trigger “bodily harm” with out holding evidence-based hearings on the matter. They merely refused to listen to and weigh the scientific proof or enable discovery relating to what lots of the insurers admitted could also be coated earlier than Covid-19 struck the world. Most circumstances have been misplaced at a preliminary stage with out discovery ever occurring. 

The moment cited matter is only a movement, and Affiliated FM could have its day to reply. We are going to maintain you recent on any developments. However it doesn’t matter what the proof exhibits, wins have been few and much between for policyholders relating to Covid-19 litigation. 

Thought For The Day 

Power and persistence conquer all issues.

—Benjamin Franklin

1 Treasure Island v. Affiliated FM Ins. Co., No. 2:20-cv-00965 [Doc. 266, Motion For Sanctions] (D. Nev. June 26, 2023).

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