Insurance Policy Types

In case you missed it, our Insurance Recovery practice launched a podcast series addressing “Key Insurance Considerations Amid COVID-19.” Throughout the series, our insurance coverage attorneys interview special guests to address the most asked questions and dig into key insurance issues impacting businesses in the midst of the COVID-19 pandemic.

Continue Reading Podcast Series: Key Insurance Considerations Amid COVID-19

What is Business Interruption Coverage?

Business Interruption Coverage is a type of insurance coverage that compensates you for lost revenue when your business is unable to operate for a period as result of some physical property loss or damage caused by a covered peril. The most common example is a fire that damages a business property. If that damage prevents a business from operating as usual, business interruption coverage could provide the revenue your company would have made during the time it was unable to operate because the building was being restored. While a fire could certainly damage a tech company’s property, a tech company might be more vulnerable than other companies to certain types of damage, such as a weather-related event that knocks out the temperature controls in a data center, thereby resulting in the loss of, or damage to, electronic data. While nearly all companies in this day and age store data electronically, a data center can be more of the heart and soul of tech company than other types of companies.
Continue Reading Fundamentals of Business Interruption Coverage—What Tech Startups Might Need to Know

By Nicholas Gellert

In response to the COVID-19 pandemic, many business locations are shuttered, with work being done, if at all, only remotely. In addition, many businesses or owners of real property may have already filed or are considering filing insurance claims for associated losses from not being able to use their owned or leased premises. The purpose of this piece is to caution owners or tenants to review their property policies closely for vacancy-related conditions or exclusions.


Continue Reading COVID-19 Insurance Alert: Review Insurance Policies for Vacancy-Related Provisions

By Jay Rossiter, Les Brown

There is growing evidence that the insurance industry is taking a concerted, joint approach to denying business interruption claims that relate in any way to COVID-19. Even if a business purchased insurance to protect against business interruption, civil authority orders, and other related events, insurance companies are discouraging and/or denying such claims without even reviewing the specific facts or insurance policy language that might be at issue. Unfortunately, insurance brokers and agents—on whom many businesses rely to give them advice in the first instance—are also discouraging claims. California Insurance Commissioner Ricardo Lara issued a directive on April 14, 2020 to address this inappropriate and damaging conduct.


Continue Reading California Insurance Commissioner Issues Notice Requiring Heightened Scrutiny for Business Interruption Claims

The general intent of business interruption (BI) insurance is to cover unexpected losses to the business from the inability to use property necessary to run the business. The current form BI policies have a mechanism for making a claim for loss of revenue and/or increased costs to the business. They typically also have Civil Authority coverage to replace lost revenue when the government closes a business’s property, but carriers generally consider this a limited remedy for a short time period (such as a month). The real disagreement from carriers regarding coronavirus (COVID-19) claims is that there must be physical property damage, and even if there is property damage, the virus exclusion prevents claims for losses from COVID-19. Moreover, carriers argue that if these coverage issues are defeated in court or removed by legislation, the carriers do not have sufficient reserves to cover the anticipated BI-related claims caused by COVID-19. For example, the American Property Casualty Insurance Association has recently claimed that being forced by legislative intervention to cover small business BI losses related to COVID-19 would cost insurers $383 billion a month.

Continue Reading Congress or the States Could Use the Existing Mechanism of BI Claims to Provide a Further Bailout to Businesses That Are Hurt by COVID-19

According to ZDNet, hackers successfully breached eleven major cryptocurrency exchanges in 2019 and stole more than $283 million worth of cryptocurrency (view reference here). We should expect this number to increase in 2020 as governments and cybersecurity experts warn that hackers will seek to take advantage of the coronavirus crisis to infiltrate corporations and as a vast number of employees move to teleworking. Specifically, cryptocurrency owners who maintain “hot wallets” should be particularly vigilant in protecting their assets because hot wallets are more vulnerable to theft and may not be covered by current insurance policies. Lloyd’s of London, however, recently announced the development of a new policy that will provide coverage for hot wallets. This blog has previously discussed the insurance industry’s attempts to develop new policies and endorsements to cover risks related to the cryptocurrency industry. See relevant past articles: Prepare for the Future With Cryptocurrency Insurance and The New Money: Cryptocurrencies and the Role of Insurance.
Continue Reading Cryptocurrency Insurance for “Hot Wallets”

Numerous businesses facing class action lawsuits brought under the Illinois Biometric Information Privacy Act (BIPA), 740 ILCS 14 et seq., have sought insurance coverage under general liability policies only to receive blanket denials. It appears some relief may be on the way as the first Illinois Appellate Court to consider the issue affirmed the decision of the trial court and found in favor of coverage. West Bend Mut. Ins. Co. v. Krishna Schaumburg Tan, Inc., 2020 IL App (1st) 191834 (March 20, 2020).
Continue Reading First Illinois Appellate Decision Finds Coverage for BIPA Class Action Under General Liability Policy

The cannabis industry has many component parts, from growers to retailers (dispensaries), and everything in between. And each component part of this burgeoning industry has its own set of risks and exposures, for which it will need insurance protection.
Continue Reading Fast Times at Ridgemont…Oh Forget It. The Cannabis Industry Is New; and So Are the Insurance Issues, Sort of.

As the coronavirus (COVID-19) outbreak continues to evolve, more businesses are feeling the impact.  Earlier this week, Apple announced that it does not expect to meet its quarterly revenue forecast due to interruption of its Chinese manufacturing operations and decreased demand from Chinese consumers.  In a previous post, we outlined how business interruption insurance coverage may help offset financial losses in a health emergency like the coronavirus outbreak.

Business interruption coverage is usually purchased as part of a commercial property policy.  As we explained, business interruption coverage typically applies when a policyholder suffers “direct physical loss of or damage to” covered property, and insurers may dispute whether a disease outbreak like coronavirus constitutes “physical loss” or “damage.”  Likewise, contingent business interruption coverage, which insures losses due to suspension of operations by a supplier, typically applies if the supplier suffers “physical loss” or “damage” that would be covered if sustained at the policyholder’s property.  And civil or military authority coverage, which insures losses when a government order restricts access to insured property, usually applies if that order is the “direct result” of physical loss or damage of the same type insured by the policy.
Continue Reading Coronavirus Coverage: Policy Language that May Cover (or Exclude) Your Business Interruption Losses Caused by the Outbreak