In this Emerging Issues Analysis, Lisa M. Cirando, who is of counsel in Orrick's New York office, identifies some of the special challenges faced by governments and businesses grappling with pandemic-related losses as they respond to the worst global economic crisis in generations. She analyzes three basic types of insurance coverage that may be available to those entities, and offers some helpful hints for pursuing pandemic-related insurance coverage claims.
“On Thursday June 11, 2009, the World Health Organization (WHO) declared the first global influenza pandemic of the twenty-first century. The WHO's designation of a pandemic for a new strain of influenza A virus subtype H1N1 (H1N1), commonly referred to as swine flu, reflects the existence of ongoing community level outbreaks in over 70 countries worldwide,” writes Ms. Cirando. “WHO's Director-General Dr. Margaret Chan has acknowledged that, further spread is considered inevitable. Past pandemics have reached at least a third of the global population.”
“Governments and businesses should carefully consider the potential for insurance coverage for their pandemic-related losses,” she cautions. “This commentary presents a brief summary of the history and treatment of H1N1/swine flu and identifies some of the special challenges that will be faced by governments and businesses. This commentary also analyzes three broad types of insurance coverage that may be available to those entities grappling with the H1N1 pandemic: Property and Business Interruption (including Loss of Attraction); General Liability; and Directors and Officers Liability. Finally, some helpful hints for pursuing insurance coverage claims are offered.”
“It is imperative that both governments and businesses acknowledge the potential that pandemic-related losses will trigger the protection afforded by several different types of insurance. Policyholders should gather and read all potentially relevant insurance policies and give timely notice of claims (or circumstances which may subsequently give rise to claims), as directed. Documents should be organized and well-maintained and experts, including legal counsel, should be retained early in the process, particularly for large claims. Relevant dates for filing proof of loss and lawsuits against the insurance company should be calculated as soon as possible. Time limits are strictly enforced under first-party property insurance; however, in most instances, time limits may be tolled by agreement,” Ms. Cirando advises.