The education sessions of the 2021 Summer Membership Meeting began with “A Look at the Legal Landscape” of COVID-19 Business Interruption (“BI”) claims, presented by John O’Bryan, Partner, Freeborn & Peters, Michael Merlo, Executive Vice President and Chief Counsel, Aon, and Kay E. Wilde, Director of Reinsurance Assumed Claims, Allstate Insurance Company. The panel treated the membership to a brisk, up-to the minute survey of the issues concerning BI COVID claims, including the crucial policy terms that insurers and policyholders are focusing on, key decisions in the US and UK, and reinsurance considerations for ceding and assuming companies alike. Highlights included an overview of recent court pronouncements on important issues like the physical damage requirement for BI claims, and a review of potentially applicable exclusions, which are important to both insurers and insureds.
The panel also provided a summary of the UK Supreme Court’s recent decision in a much anticipated “test case” brought by the UK Financial Conduct Authority to determine insurer liability for COVID-related BI cases under certain property coverages. The court’s decision was generally favorable to policyholders, with the panel reviewing the potential influence of that case on two key issues: interpretation of the “trends” clause in BI contracts, and determining causation.
Finally, the panel provided important food for thought on how all of these issues might play out in a reinsurance presentation, emphasizing issues that reinsurers and cedents would both do well to consider. Nearly every topic covered by this panel in a scant 50 minutes could justify its own presentation, and it is a credit to the panelists that they were able to cover as much as they did while still providing a thoughtful and focused presentation for our membership. A replay of the presentation is available to members through the AIRROC On Demand platform.