Given that the pandemic struck very last March, policyholders have sued insurance policy carriers almost 2,000 instances alleging their policies lined business enterprise losses because of to COVID-19 and the related civil authority orders. These statements have mostly concentrated on business-interruption coverage with policyholders trying to find reimbursement for misplaced income thanks to pandemic-connected required closures orders. COVID-19-connected statements have also arisen below occasion cancellation, directors and officer’s liability and basic liability insurance policies. Other forms of claims may possibly also be about the corner. For illustration, employers’ responses to the pandemic improved their vulnerability to cyberattacks resulting in further publicity to brokers for claims by policyholders who do not have cyber-specific insurance policies coverage.
While some policyholders have sued their brokers for COVID-19-related coverage gaps, our study implies there have been couple situations. This is not stunning, because policyholders generally wait around to pursue errors and omissions claims until eventually they exhaust initiatives to pursue protection, and policyholders’ counsel are probable awaiting the final result of protection fits just before pursuing brokers. If courts continue on to find—as they have in most cases—that sector-common house procedures do not include COVID-19-similar losses, policyholders could transform to their brokers and argue for legal responsibility flowing from the broker-customer romantic relationship. Consumers might contend that additional endorsements or coverage kinds need to have been available. To the extent that courts conclude that the direct physical loss requirement is glad but the claim is excluded because of to the presence of a virus exclusion, policyholders might also contend brokers should really have delivered quotations devoid of the virus exclusions. Lastly, to the extent coverage would have been obtainable but brokers did not post a claim to the insurers, brokers may well deal with claims of negligent statements handling.