The coronavirus crisis is taking a toll on the U.S. legal system as courts are restricting access and altering procedures. Dentons, a global law firm, addressed the impact of COVID-19 on ongoing cases in a recent webinar led by Michael Duvall, Partner; David Quam, Counsel; and Kelly Graf, Managing Associate.
Litigators have ongoing responsibilities to their clients to keep up with key deadlines, during the “slowdown.” These responsibilities include keeping them informed of scheduling, continuing to meet filing deadlines, and advocating for the clients’ interests. Judges have significant discretion to keep their cases moving along.
The webinar covered some of the litigation risk facing businesses with “enterprising” plaintiff’s lawyers actively looking for clients. The risks include data breaches arising from remote workers using unsecured home computers to access confidential data; safety and compliance issues related to remote work; exposure to the virus by employees who are not working remotely; event cancellation; claims of false or misleading advertising against companies capitalizing on demand for products like hand sanitizer; and price gouging.
Dentons has put together a 50-state tracker
that it’s maintaining of coronavirus-related orders, directives, financial
assistance, health and business directives, and updates on court and
legislative sessions.
U.S. auto insurers will return more than $10 billion to their
customers nationwide, according to an estimate released on April 11 by the Insurance
Information Institute (Triple-I).
“Insurers
are again fulfilling their role as economic first responders by providing
financial relief to customers when they need it most,” said Sean Kevelighan,
CEO, Triple-I. “If the rest of the nation’s private-passenger auto insurers are
as generous as the companies the Triple-I knows about, we project insurers will
be giving customer refunds, discounts, dividends, and credits totaling $10.5
billion.”
The
Triple-I’s $10.5 billion estimate is based on its analysis of 14 U.S. auto
insurers who announced this
week premium refunds, discounts, dividends, and credits
totaling $8.1 billion. These insurers cited reduced policyholder mileage
and the receipt of fewer claims amid the COVID-19 crisis as the reasons they
were able to make these decisions.
Given
there are hundreds of companies that sell private-passenger auto insurance in
the U.S., the Triple-I looked at the industry’s cumulative market share and
estimated an additional $2.4 billion in refunds, discounts, dividends and
credits were forthcoming. The Triple-I has updated its Fact Sheet, Insurers Offer
Forward-Looking Solutions For COVID-19 Recovery, to reflect the
latest steps taken by the nation’s auto insurers.
“These
are challenging financial times for millions of Americans, and the country’s auto
insurers are making it easier for their customers to get through this
extraordinary time in U.S. history,” Kevelighan stated.
The
Triple-I estimates the typical U.S. auto insurance customer spent $1,113 in
2019 to cover a single private-passenger vehicle.
Auto insurers are giving refunds to their customers as
people are driving less due to coronavirus shut-downs. No action is required by
customers to receive credit in most cases, but Sean Kevelighan, Triple-I CEO,
urged customer to reach out to their insurers. “We always recommend the
customer contact the insurer and explain their individual situations. Insurers
are always happy to look at individual situations and work with the customer,”
he said in a Weather
Channel interview.
Here are the refunds some of the major auto insurers
are offering:
Allstate customers will get “Shelter-In Place
Paybacks,” adding up to $600 million over the next two months. “This
is fair because less driving means fewer accidents,” Tom Wilson, the company’s chair,
president and chief executive officer said in a statement.
American Family will return approximately $200 million to its auto insurance customers.
Farmers auto customers will receive a 25 percent reduction in their April premiums. “We are committed to helping customers during this unprecedented time,” said Jeff Dailey, the company’s CEO. “As we continue receiving updated information in the coming weeks, we’ll assess additional ways to take care of our customers.”
The
Hanover Insurance Group will return 15% of April and May auto premiums to its eligible
personal lines customers. The company also announced additional customer relief
measures and a commitment to contribute $500,000 to nonprofits in local
communities to address needs arising from the public health crisis.
The
Hartford announced its COVID-19 Personal Auto Payback Plan, which will
provide customers with a 15 percent refund on their April and May personal auto
insurance premiums. Over the next two months, the company will distribute
approximately $50 million to its customers.
Liberty Mutual will return approximately $250 million to
customers. Personal auto insurance customers will receive a 15 percent refund
on two months of their auto premium.
MetLife
Auto & Home customers will
receive a 15% credit for April and May based on their monthly premiums. The
company is also extending coverage under all personal auto insurance programs
at no additional charge while customers are making deliveries in response to
the crisis, effective March 20, 2020, through May 1, 2020. Additionally,
MetLife Auto & Home is offering identity protection coverage to its
customers.
State Farm announced an up to a $2 billion dividend that will
go to its auto insurance customers. Customers do not need to take any action to
receive this dividend, which will appear as a credit on their auto policy. On
average, State Farm Mutual auto customers can expect to receive a credit of
about 25 percent of premium for the time period March 20 through May 31; exact
percentages will vary by state.
The
Travelers Companies is giving U.S. personal auto insurance customers a 15 percent
credit on their April and May premiums. Travelers will continue to assess the
program as more information comes to light about the impact of the COVID-19
crisis on the driving environment and auto claims.
USAA is set to return $520 million to its members for
driving less during the COVID-19 shelter-in-place orders. The company said in a
statement that the payment is a result of data showing members driving less
during the “Stay Home, Work Safe” orders across the country.
IICF’s Children’s Relief Fund
The Insurance Industry Charitable Foundation (IICF)
has launched a national industry-wide fundraising campaign to benefit
vulnerable children. Funds raised through the COVID-19 Crisis: IICF
Children’s Relief Fund will help support children at risk of food
insecurity, educational disruption, family homelessness and other circumstances
exacerbated by the crisis. To make a donation and support children in need,
please contribute here.
The Allstate Foundation
The
Allstate Foundation together with Allstate employees and agency
force members, will donate resources across the nation to support communities
during the COVID-19 crisis.
The Foundation is contributing $5 million to accelerate relief and
recovery for domestic violence victims, youth in need, first responders and
communities at large.
“It’s incredibly inspiring to see people finding ways to take care
of each other,” said Elizabeth Brady, Allstate chief marketing, customer and
communications officer and trustee of The Allstate Foundation. “For 68 years,
The Allstate Foundation has delivered on Allstate’s promise to serve as the
Good Hands – especially in a moment of need.”
The Nationwide Foundation
The Nationwide
Foundation is making $5 million in contributions to local and national
charities to support medical and economic response efforts.
“As communities experience impacts related to the pandemic,
many non-profit organizations stand on the front lines, providing basic
necessities, wellness services and support to those in need,” said Nationwide
CEO and Nationwide Foundation Chairman Kirt Walker. “Finances, staffs, programs and resources are
being stretched as these non-profits not only serve their communities but feel
the impact themselves. During these challenging times, we each have a
responsibility, when we can, to lift those around us.”
An article in Claims Journal: Anticipated
Coronavirus Claims Scenarios Across Major Coverage Lines discusses
the wide range of insurance lines in which claims could rise, whether as a direct result of the
pandemic or of social, institutional, and governmental reactions to it.
The Financial Times reports on two shareholder lawsuits
relating to coronavirus that have already been launched in the United States,
one against Norwegian Cruise Lines, the other against a pharmaceutical company
called Inovio.
An NBC6
(Miami) report highlights actions that some major
insurers are taking to provide relief to their customers who are facing
financial difficulties due to the coronavirus pandemic. Said Sean Kevelighan,
CEO of Triple-I, “In the insurance community, we refer to ourselves often as
financial first responders and you’re really starting to see that kick in right
now.” Some companies are allowing customers to delay payments without penalties
or initiate a personal payment plan. A few are offering relief in the form of
paybacks to customers.
Other recent articles related to coronavirus from a property and casualty insurance perspective:
Auto
A New York Daily News
article describes the rebates auto Insurers are offering to their customers due
to coronavirus-induced driving lull. Liberty Mutual, American Family and
Allstate are among the companies offering refunds.
A Winknews report
discusses the assistance available to customers during the coronavirus pandemic
and includes an anecdote from a policyholder who was told by his insurer that
he couldn’t get an extension. Triple-I’s Mark Friedlander says this customer’s experience
is not the norm.
Business Interruption
Triple-I CEO Sean Kevelighan was quoted in Washington
Examiner and Santa Rosa, Calif. Press
Democrat articles on business interruption coverage.
Artemis published this
interview with PCS’s Tom Johansmeyer on silent pandemic risk.
The Financial Times reported on the
growing controversy over how much companies can claim from their business
interruption insurance policies related to the coronavirus pandemic.
As local, state and federal agencies scramble to react to
the public health needs of COVID-19, cities and towns must also keep one eye on
the weather forecast and river levels, according to this
Chicago Tribune article.
Workers Compensation
The Minnesota Legislature passed a workers’ compensation
bill Tuesday to cover first responders, health care workers and daycare
workers. The legislation is effective April 8 and is in place until May 1. Minnesota to Ensure Workers Comp to Responders
With COVID-19
Triple-I’s Daily newsletter covered many of the preceding stories this morning. To subscribe to the Triple-I Daily contact daily@iii.org.
Insurance
rating agency A.M. Best said it is maintaining its stable market segment
outlook on the U.S. health insurance industry, despite the impact of the
COVID-19 virus outbreak. It cited:
A trend of strong earnings;
Strengthened risk-adjusted capitalization;
Lower-than-estimated utilization and medical cost trends; and
The cancellation or postponement of visits for routine care and
elective procedures.
U.S. life insurers continued in
2019 to increase their holdings of commercial mortgage loans, an asset class that
industry participants say faces unique challenges during the coronavirus
pandemic, S&P Global reports. The long-term nature of
commercial mortgages makes them a good asset match for the long-duration
liabilities life insurers carry. However, commercial mortgage loans could be
under stress as the pandemic-sparked economic slowdown continues.
More than 50 Texas health policy
and industry groups are urging Gov. Greg Abbott to expand the state’s Medicaid
program to cover more than 1 million people as a way to slow the spread of the
coronavirus and the illness it causes, COVID-19.
Millions of people have lost jobs
— and often the health coverage that came with those jobs. More still have had
their work hours reduced or have received drastic pay cuts, so monthly premiums
that may have been manageable before are now out of reach.
A great deal of uncertainty
surrounds how the COVID-19 epidemic will evolve, including how many people will
become infected and how many will become severely ill and require
hospitalization. The Kaiser Family Foundation provides a range of cost
estimates for the Trump administration’s proposal to reimburse hospitals for
COVID-19 treatments for uninsured patients, based on results from recent
studies and models.
We’ve been following the initiatives launched by insurance companies to alleviate the impact of the coronavirus crisis (see Insurers Respond to COVID-19). Here are several more examples of insurers’ commitment to helping their agents, employees, customers, and the broader community weather the pandemic.
The
Hanover has
taken several steps to help ease the burden for customers, including:
Considering a covered premise as
“occupied” while mandatory closures are in effect
Extending rental car days if a
policyholder’s vehicle is in the shop and cannot be repaired or returned
Paying additional living expenses to
homeowners who are forced from their homes following a covered loss
Offering flexibility on bill payment
options for those experiencing financial hardship
A 60-day hold on cancellations and
non-renewals for non-payment
Permitting business use of hired,
non-owned autos for delivery purposes at no additional charge and extending
personal auto coverage to individuals delivering food, medicine, and other
essential goods at no additional charge
The company
is also investing in relief efforts,
including $500,000 to local non-profits to
provide pandemic-related assistance to people and organizations across the
country; donating critical medical supplies and masks to health professionals;
and collaborating with corporate teambuilding company Cheeriodicals to deliver
“cheer-up” gift packages to local hospitals to show appreciation for health care providers.
Liberty Mutual has created a $4
million fund offering low-threshold, immediate grants of up to $10,000 for 450
community partners – with priority given to groups providing healthcare or
serving the homeless, elderly, and other populations deemed at highest-risk.
Liberty Mutual employees continue to be able
to make online charitable donations that are supported further by company
gifts.
The company has also enabled employees to work
remotely and reports no impact to normal customer
service operations.
The MetLife Foundationannounced on March 31 that it is committing
$25 million to the global response to COVID-19 in support of communities
impacted by the pandemic.
The grant funding from MetLife Foundation will span all regions where MetLife
operates and address both short- and longer-term relief efforts.
“Supporting and protecting
people is at the core of who we are and what MetLife stands for – in our
business and in the Foundation’s giving,” said MetLife President and CEO Michel
Khalaf.
Initial grants will
support communities and people with urgent needs for food, healthcare,
childcare, and direct financial support.
As part of this
commitment, MetLife Foundation and other MetLife entities have already pledged
$4 million to relief efforts in Asia, EMEA, Latin America, and the United
States, including $1 million to U.S. food banks to help them deal with
increased demand for their services as a result of coronavirus.
State
Farm is donating
millions of
dollars to
relief efforts, including Feeding America, American Red Cross, and the Illinois
COVID-19 Response Fund. Additionally, the company has also donated hundreds of
masks and other supplies to local hospitals and teamed up with the Atlanta
Hawks to help provide meals to vulnerable populations and healthcare workers in
Atlanta.
State Farm has also transitioned most
employess to work from home arrangements and has set-up a matching-gift program
in which employees donations to qualified nonprofits can be matched by the
State Farm Foundation.
State Farm customers who are experiencing
financial hardships are encouraged to call their agents to discuss assistance
options.
Westfield Insuranceis providing billing
options for financial hardships and suspending all policyholder cancellations
until May 31, 2020, or as directed by each state. Extended payment plan may be offered to those
policyholders. As of March 20, 2020, late fees also will be waived through May
31, 2020, or as directed by each state.
Westfield will contribute nearly a million
dollars toward nonprofit partners, including the Akron Canton Foodbank,
Cleveland Foodbank, United Way of Cleveland, Feeding Medina County, and Feeding
America.
Westfield’s foundation is matching employee
donations to their local foodbank or United Way dollar for dollar up to $50. The
company is also working with agency partners across the country to distribute
Legacy of Caring grant dollars for them to donate to nonprofits in their
community who are challenged because of COVID-19.
As a regulatory/government solution, trade
groups representing insurers have voiced support for the
proposed COVID-19 Business and Employee Continuity and Recovery Fund. It would
be financed by the federal government and provide essential funds to impacted
employers and employees.
Tell us how your company is contributing to the
pandemic relief efforts: communications@iii.org.
One of the largest
car-insurance companies in the country and a smaller Midwestern auto insurer
are refunding hundreds of millions of dollars to their policyholders, citing a
dramatic drop in accident claims from Americans hunkered down in their homes, The
Wall Street Journal reports.
PathogenRX, a parametric insurance policy
developed by broker Marsh, Munich Re, and technology firm Metabiota, is designed
to provide business interruption insurance in the event of a pandemic, Insurance
Journal reports.
When the coronavirus outbreak forced the
cancellation of Wimbledon it looked like game, set, and match against the All
England Club. It turns out, The Times reports, that the club has
insurance that covers infectious diseases and is putting together a claim
potentially in excess of £100 million.
World insurers told
governments on Monday that making them pay out on losses suffered due to the
coronavirus that were not covered by policies risked destabilizing the
insurance industry, Reuters reports.
Insurance brokers say viruses and pandemics are specific
exclusions in many such policies, which are often included with standard
property and casualty coverage. But whether COVID-19 is the basis for a
business interruption claim remains an open question as government leaders and
the plaintiffs’ bar wrestle over the issue.
COVID-19 could produce a big increase in social inflation,
according to A.M. Best. The reason: expectations that businesses will sue their
insurers in an attempt to access their business interruption coverage for
losses relating to the coronavirus pandemic.
SARS
infected 8,000 people and led to millions of dollars in business-interruption
insurance claims – including a $16 million payout to a single hotel chain. As a
result, The Washington Post reports, many insurers added exclusions to
standard commercial policies for losses caused by viruses or bacteria.
The Federal Emergency Management Agency (FEMA)
announced that it will extend the grace period to renew flood insurance
policies to help policyholders affected by the coronavirus (COVID-19) pandemic.
FEMA said it would push back the grace period from 30 days to 120 days.
First responders are preparing for raging wildfires that they
expect will consume thousands of acres and drive some residents from their
homes in upcoming months. But this year, CNBC reports, preparations have
stalled. The coronavirus pandemic has hit the country’s already strained
emergency services, raising concerns over inadequate disaster relief during
peak fire season.
Florida’s Chief Financial Officer has ordered the Division of Risk
Management to fulfill workers’ compensation claims for frontline employees who
work for the state, the Tampa Bay Times reports. But the order doesn’t
include similar workers in the private sector.
