Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Commercial Insurance Rate Hikes Near Double Digits In Q2: Willis. This week we’re bringing you:
This time the insurance industry lost after reading the small print*
When can one say a notifiable disease has occurred within a “vicinity” if the whole country is in lockdown? For fans of dense legal disputes, the high court’s judgment in the big Covid-19 business interruption insurance case offered hours of rhetorical fun. For non-fans, here’s a summary: the insurance industry quibbled over the small print in policies and thus reinforced every damning caricature of its way of working.
Not in every case, to be clear. As might be expected when the court was considering 21 sample wordings in policies, there were differences and nuances; individual firms even won on a few examples. But, taken as a whole, the industry looks grubby.
Victory for the Financial Conduct Authority, which brought the test case to provide legal clarity, may have been partial but it was also significant. Barring a successful appeal by the insurers, thousands of small businesses with “non-damage” clauses covering instances of business interruption should now get some money.
Travelers wins another COVID-19 coverage ruling*
Another federal court in California on Monday ruled that an insurer does not have to cover business interruption losses for a policyholder that closed its operations due to government-ordered COVID-19 lockdowns.
A Travelers Cos. Inc. unit is not obligated to pay a lost income claim submitted by Mudpie Inc., a San Francisco children’s clothing and toy store, because the store did not suffer a physical loss under the terms of the policy, the court ruled.
In Mudpie Inc. v. Travelers Casualty Insurance Co. of America, which was heard in U.S. District Court for the Northern District of California, the store said it had lost income after it was forced to close earlier this year to help limit the spread of COVID-19.
New Jersey latest COVID-19 comp presumption state*
Gov. Phil Murphy, D-New Jersey, on Monday signed into law a bill that provides workers compensation benefits for essential workers who acquire COVID-19.
Lawmakers in July passed S.B. 2380, which creates the rebuttable presumption that COVID-19 is an occupational disease during a declared state of emergency for certain workers.
According to the law, essential employees are classified as those whose job duties are considered essential during an emergency response and recovery operation; public or private sector employees whose job duties are essential to the public’s health, safety, and welfare; emergency responders and workers at health care facilities and those performing jobs that support a health care facility, such as laundry, research, and hospital food service.
Munich Re halts sale of pandemic business coverage*
German reinsurer Munich Re has halted the sale of coverage to protect against business losses in future pandemics, the Bloomberg has reported.
The decision is reported to have been made after the firm took a €1.5 bn ($1.8 bn) hit due to Covid-19 in the first half of this year.
Munich Re reinsurance head Torsten Jeworrek told the news agency: “We are currently examining whether we will offer new contracts that include pandemic protection in property and casualty insurance in the future.
“For the moment it has been suspended, for example with respect to event cancellations.”
According to the report, a major portion of these losses were brought by the cancellation of events in the wake of the pandemic this year.
In March, Munich Re issued a profit warning and stopped a share-buyback program due to a spike in Covid-19 claims. The company did not issue the new profit guidance for this year.
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