As plaintiffs’ lawyers representing both people and businesses, we are no strangers to dealing with insurance companies and making them pay. We have seen some very interesting developments in the insurance world since the spread of COVID-19.
The first thing we noticed: adjusters and defense attorneys started calling and offering to settle cases. We were not surprised. The insurers’ money is tied up in the markets, and the markets suddenly became uncertain. In any time of great uncertainty, people want to regain certainty. One of the things worth knowing is that big business is often willing to pay more to obtain certainty. And insurance companies are renowned for being risk-averse, certainty-seeking enterprises. (Just watch Ben Stiller in the movie “Along Came Polly.”)
The second thing we saw: insurance companies started denying claims under commercial policies for business interruption insurance coverage. Businesses everywhere are shutting down or slowing down in the wake of COVID-19. Many paid insurance premiums for years, thinking they had business interruption insurance coverage. Now, when they need it, the insurance companies are denying the claims.
The third thing we learned: insurance companies are trying to settle high-stakes liability cases (see #1) so that they can divert resources to defend against claims for business interruption insurance (see #2). On its own, this might seem shocking, or even crazy.
But it all makes sense. The insurance companies are spooked. They are predicting that business interruption losses could exceed $430 billion per month, over 70 times the premiums they collect. The National Association of Insurance Commissioners said that “if insurance companies are required to cover such claims, such an action would create substantial solvency risks for the sector.” Meanwhile, pro-insurance industry politicians are trying to stop legislative efforts at the state and federal levels to help struggling businesses and make the insurance companies pay these claims.
As we’ve said before: If the insurance company denies your claim, you might not want to take their word for it.
Sometimes, you have to sue the insurance companies to make them pay.
We are actively investigating insurers for wrongfully denying coverage of business interruption losses during COVID-19. Call us at 630-527-1595 to talk to one of our business attorneys. You can read more about our business interruption insurance practice here.
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