Insurance (CLE)

The current global health crisis brought by COVID-19 continues to radically modify important economic activities across the world. In response to the pandemic, the representations and warranties (R&W) insurance landscape has also started to witness notable developments, specifically in relation with COVID-19-related exclusions and due diligence expectations.

The construction industry has been hounded by unprecedented threats and other legal pitfalls. Various claims for damage to property or persons arising from construction projects, often expose companies and individuals to the risk of costly litigation. In order to prevent or limit risks arising from such claims, general contractors, subcontractors, and owners must adopt an insurance program that will effectively mitigate the risks of claims and potentially provide a source for coverage and recovery.

Subrogation is the legal right of an insurer to recoup the amount of insurance claim it paid to a policyholder by suing the party responsible for the damages. However, many insurance companies miss the opportunities offered by subrogation as they often neglect to pursue their right, or they do so, but with ineffective subrogation practices.

Depositions are a crucial part of the pre-trial discovery in insurance coverage and bad faith litigation. It also involves nuances distinctive to insurance law, such as the legal complexities brought by Rule 30(b)(6), which litigators need to be well-versed in. Successful management of litigation deponents is a significant step to prevailing in the case, hence, thoughtful strategies need to be put in place.

An insurer’s ability to refuse a settlement case is only limited on account to its duty to act in good faith. Instead, they owe its policyholder a duty to settle if, and only if, the policyholder’s settlement amount is within the limit of the insurer's policy.

Claim handler's depositions play a significant role in insurance coverage disputes. However, these types of disputes often include several underlying factors that the use of credible witnesses and experts, and the preparation of depositions become prone to risks and damages.

The deposition of a claim handler is very significant to an insurance coverage dispute, especially in the field where there are bad faith allegations.

Over the last several years, there had been a surge of bad faith insurance lawsuits in the U.S. Policyholders would typically use bad faith claims and extra-contractual allegations against their insurers in high-stakes risk litigations as seen in previous cases.

The COVID-19 pandemic is drastically affecting today’s global economy. Because of temporary closures and disrupted supply chains and sales, businesses today are confronted with profound income losses. This fallout has prompted an upsurge in business interruption insurance claims. Whether standard commercial policies provide coverage for virus-related income loss is hotly contested, however. Likelihood of recovery on such claims will depend on the terms and conditions of individual policies, as well as ongoing developments in litigation and legislation.

Since the onset of shutdown orders due to COVID-19, business owners have turned to their insurance policies to seek coverage for lost revenue and other pandemic-induced expenses. Insurers have generally denied business interruption coverage to these claims, referring to policy requirements for direct physical loss. Policyholders have brought their claims to the courts and, in most cases, judges have ruled in favor of the insurers. However, this trend is expected to change as plaintiffs start to find the weaknesses of the defendants’ arguments.