PAPERWORK PANDEMIC: COVID-19: Lawmakers Should Protect Businesses Filing Business Interruption Claims.

• Author: Acunto, Steve

Many business insureds believe that they have had possible business interruption losses, and it is feasible that COVID-19 related interruptions are covered under their insurance policies. Insurers, for the most part, have already asserted that coverage is not triggered by COVID-19 per se because COVID-19 did not damage nor cause physical damage to whatever property is insured. Most insureds are not sure when their loss began, how long it will last and whether the courts or regulators will change the position of insurance companies. As it stands now, nothing short of litigation or executive mandate will spur an insurance payment for most business interruption claims resulting from COVID-19. One thing that has become very apparent is that insurers are trying to get insureds on record so that the circumstances of their claims are documented.

On the other hand, insureds, insurance brokers/agents, claims people, and attorneys are steering insurance brokers/ agents to put insurers on notice so that late reporting of a business interruption claim to an insurer does not prejudice a claim. To avoid liability, insurance brokers and agents must comply.

This claim reporting will dwarf the claims-load of every single natural disaster in insurance history. Every insured, in every location, has been or will soon be affected by this awful virus. The flood of claims and counterclaims will be a mountain of inefficiency in paperwork.

The proper claims process requires every insured with a business interruption policy to put the insurance company on notice that there might be a claim. The claim will have to be made to the insurance broker/agent and a copy kept by the claimant; then, the claim must be entered into the claim system of the insurance broker/agent, and, after that, the claim must be entered into the claim system of the insurance company. Subsequently, the insurance broker/agent will have to go back to the insured and request additional claim information.

Legislators or Regulators could reduce this massive data entry burden and assist...