The recent spread of the novel coronavirus (SARS-CoV-2), which causes coronavirus disease known as COVID-19, has and will cause disruption to businesses and communities and take a significant human toll.
The problems highlighted by the spread of SARS-CoV-2 provide a model to illustrate difficulties in the defense of liability claims and insurance issues in the context of new types of losses. Policyholders who have claims made against them and submit mundane insurance claims often end up meeting frustration in a process foreign to them. By contrast, trusted experienced defense counsel address complex claims every day, as do insurance companies, and their experience shows. Policyholders seldom make significant insurance claims, and thus have less experience related to new claims and liabilities.
As a lawyer for corporate policyholders, I can attest that the average purchaser of business insurance understands that the primary purpose of insurance is to insure against losses. Appleman, Insurance Law and Practice §7001 (1981); Newmont Mines Ltd. v. Hanover Ins. Co., 784 F.2d 127, 135–36 (2d Cir. 1986) ("[T]he meaning of particular language found in insurance policies should be examined in light of the business purposes sought to be achieved..."). Indeed, most policyholders would say that purpose—to insure—meets their "reasonable expectations." Keeton, Insurance Law Rights at Variance with Policy Provisions, 83 Harv. L. Rev. 961, 967 (1970). A new type of liability and new insurance claim accentuates the disparity in experience among defense....
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