Struggling merchants, insurers battle over pandemic coverage

By Michael Liedtke

THE ASSOCIATED PRESS

Restaurants, bars and other merchants struggling to stay afloat during the coronavirus pandemic are desperately reaching out for a lifeline from insurers that in turn contend they are being miscast as potential saviours.

Shutdowns and crowd restrictions imposed by state and local governments to limit the spread of the virus have resulted in more than $1 trillion in estimated losses so far for thousands of rapidly sinking small businesses.

That has prompted a flood of claims under business interruption insurance policies that have been almost universally rejected for a variety of reasons, including boilerplate provisions inserted by insurers after the SARS outbreak in 2003 to exclude disruptions caused by virus and bacteria.

“This is an existential threat,” said John Houghtaling, a New Orleans attorney who is representing restaurants and other businesses seeking about $8 billion in losses that he estimates they will suffer during the pandemic.  “A lot of people who did the right thing and bought this coverage thinking they would be thrown a lifeboat if disaster struck are now being told, `Sorry, let the Coast Guard come and get you instead.”’

So many lawsuits have been filed against insurers in the U.S. that a Thursday hearing has been scheduled before a federal judicial panel in Washington to decide how to manage them all in the months and possibly years  ahead. The panel’s review involves more than 200 federal complaints in addition the other lawsuits filed in state courts by the owners of meat-and-potato cafes as well as some of the nation’s best-known and most exclusive restaurants, such as the French Laundry in Napa Valley’s wine country and California cuisine pioneer Chez Panisse in Berkeley, California, which sued its insurer, AMCO, for breach of contract earlier this month.

“The servers, cooks, farmers, ranchers and other hard-working people in the Chez Panisse family are seeing their livelihoods in jeopardy because AMCO has declined to live up to its responsibilities,” said Alice Waters, Chez Panisse’s owner.

President Donald Trump weighed in on the thorny issue in April when he told reporters that he suspected many insurers were dodging their obligations.  “You have people that have never asked for business interruption insurance (payments) and they’ve been paying a lot of money for a lot of years for the privilege of having it,” Trump said.  “And then when they finally need it, the insurance company says, `We’re not going to give it.’ We can’t let that happen.”

Although sympathetic to their policyholders’ plights, insurers say most business interruption policies were designed to cover shutdowns caused by catastrophes such as hurricanes and terrorist attacks while excluding pandemics that cause widespread losses too staggering to cover, even for an industry sitting on $850 billion in reserves. Only a small number of businesses sought additional coverage that specifically includes losses caused by pandemics, said David Sampson, CEO of the American Property Casualty Insurance Association, an industry trade group.

Even so, Lloyd’s of London has estimated the insurance industry still will pay out $107 billion in pandemic-related claims, more than the combined amounts doled out after the terrorist attacks in September 2001 and Hurricane Katrina in 2005. Besides businesses that bought special coverage, the claims include payouts to major sporting and entertainment events that bought cancellation policies coverage, such as the Wimbledon tennis tournament that is collecting about $140 million under its pandemic policy. Insurers also are paying workers’ compensation claims for employees who get sick on the job.

“This popular meme out there that the insurance industry isn’t paying for losses is just not true,” Sampson said.

But the claims insurers are paying only a small fraction of the $231 billion to $431 billion in monthly losses piling up at U.S. businesses with fewer than 100 employees, according to the industry’s estimates.

At that rate, insurers would have no money left to cover non-pandemic claims for auto accidents, home fires and even damages to businesses during the protests across the country since George Floyd died at the hands of Minneapolis police in May, according to industry consultant Robert Hartwig of the University of South Carolina’s risk and management centre.

The denial of business interruption coverage is also hurting bars across the country, many of which haven’t been able to offer pick-up or outside dining like restaurants have. The Ivy Club, which also offers live music during normal times its Albany, California, venue, has had to lay off most of its 20-employee staff since March and is now raising money from community donations while it fights its insurer over its business interruption claim.

“Everything is so uncertain that we really don’t know what we are going to do,” said Summer Gerbing, one of the Ivy Room’s co-owners.

Meanwhile, lawmakers in California and several other states have drawn up legislation that would force insurers to cover the business interruption losses that have piled up since March  a requirement that, if imposed, the industry is already vowing to fight as unconstitutional.

The dispute boils down to whether business interruption policies can be applied to instances when there is no physical damage or destruction to a restaurant or store that is being prevented from conducting business as usual.

In one of the first decisions issued on that question earlier this month, a Michigan state judge sided with an insurer’s rejection of a claim for $650,000 for two months of losses that Nick Gavrilides said he suffered at two restaurants, the Soup Spoon Cafe in Lansing, Michigan, and the Bistro in nearby Williamston, Michigan.

Gavrilides’ lawyer, Matthew Heos, contended business interruption coverage should apply because authorities prohibited customers from physically entering the property, an assertion derided as “nonsense” by Judge Joyce Draganchuk during a July 1 hearing posted online.

“There has to be something that physically alters the integrity of the property,” Draganchuk concluded in her dismissal of Gavrilides’ case.

Gavrilides is now serving customers inside both restaurants but only at half capacity, a restriction that is making it difficult to stay open even though they are operating with skeletal staffs. The Soup Spoon Cafe now has 12 to 15 employees, down from 40 just before the pandemic.

“It’s literally day to day for us now,” Gavrilides said. “I feel let down for everybody. I thought by paying my premiums for the past 14 years and it my service was ever interrupted, I would be rescued. But I guess that isn’t going to happen now.”

Mutual of Omaha insurance firm removing longtime Indian logo

OMAHA, Neb. _ Mutual of Omaha plans to replace its longtime corporate logo, which for 70 years has featured a depiction of a Native American chief, the insurance company announced Friday.

The move comes as corporations and sports teams around the country face increasing pressure to dump nicknames and depictions that reference American Indians amid a nationwide movement calling for racial justice.

“We believe the decision to retire our corporate symbol is the right thing to do and is consistent with our values and our desire to help overcome racial bias and stereotypes,” Mutual of Omaha CEO and Chairman James Blackledge said in a news release Friday.

The Omaha, Nebraska-based company is in the process of creating a new logo.

Blackledge said the company also is committing an additional $1 million to the $2 million is donates annually to community-based initiatives to address racial equality and social justice. The company’s management team will also undergo additional training on diversity and inclusion, including unconscious bias training, the company said.

Mutual first adopted its Indian chief head logo in 1950, according to its website. The company has said the chief logo was intended to represent the Plains Indians and their values of strength of character, honesty and care for their members, according to the Omaha World-Herald.

U.S. insurance adjusters in Calgary to respond to damaging hail storm

U.S. insurance adjusters in Calgary to respond to damaging hail storm

The excerpted article was written by 

A parking lot outside a hotel in northeast Calgary is full of American licence plates from states like Texas, Florida, Oklahoma, Mississippi, Utah and South Carolina.

CRU Adjusters confirmed to Global News it has hired adjusters from across the continent following the hail storm that pounded the city earlier this month.

About 300 adjusters have come in from outside Alberta, including about 100 from the United States, for a mix of desk and fieldwork.

A CRU executive said it has strict COVID-19 protocols  — employees are to stay in their rooms as much as possible, wear masks when leaving, and practise social distancing at customers’ homes. Customers are contacted by phone and do not come out of the home for exterior inspections. When CRU adjusters have to go into the home, homeowners are advised to stay in different rooms during assessments.

Before being dispatched to Calgary, the adjusters had to answer health, travel and close contact questionnaires for CRU, and are advised to immediately self-isolate if they have any coronavirus-related symptoms and to contact Alberta Health.

The adjusters have been in Calgary for nearly two weeks and have more than six weeks work ahead of them. CRU said they are not planning on bringing any more adjusters to the province.

The adjuster company said they worked with the Insurance Bureau of Canada (IBC) and Public Health Agency of Canada (PHAC), who deemed these adjusters an essential service and provided them with necessary documentation.

And according to PHAC’s website, the documentation excuses the adjusters from having to self-isolate for 14 days.

Alberta Health said it was unaware of this group of adjusters coming to Calgary, and have begun working with PHAC to monitor the adjusters.

One hotel employee Global News spoke with said they ask out-of-province guests to respect social distancing, and even ask them to skip attending the complimentary breakfast.

In email from General Manager Ryan Ocbina said Element by Westin Calgary Airport follows all provincial and federal public health guidelines and follows a chain-wide commitment to cleanliness during the coronavirus pandemic. Ocbina’s hotels also provide complimentary masks and have removed all high-contact areas like self-serve coffee.

In an emailed statement, IBC confirmed it does help insurance companies “gain approval from relevant authorities to bring adjusters in from outside jurisdictions to assist consumers in response to catastrophic events, if required.

“Insurers are utilizing as many in-house and local claims representatives as possible to manage the high volume of claims from this event.”

But most insurance companies Global News spoke with confirmed they are using local adjusters.

“We can confirm that the vast majority of insurers have been using Canadian adjusters,” the ICB statement said.

“Some insurers utilize third-party independent catastrophic adjusting firms during catastrophic events to ensure clients get help as quickly as possible.”

Pandemic crisis forecast to hit insurers for $200 billion

LONDON _ The pandemic will cost the insurance industry over $200 billion, according to Lloyds of London, who estimated that its own payouts are now on a par with the Sept. 11, 2001 attacks or the combined impact of hurricanes Harvey, Maria and Irma in 2017.

Lloyds, which as an insurance market pays out to insurers affected by disasters, said it expects to pay between $3 billion and $4.3 billion to insurance companies to help them cope with the COVID-19 pandemic.

Losses could widen if lockdowns continue into the next quarter, which would push the overall cost to the insurance industry to $203 billion. Unlike the storms, for example, the pandemic’s impact is global, systemic and long term.

“Lloyd’s believes that once the scale and complexity of the social and economic impact of COVID-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events,” the London-based insurance market said.

The study undertaken by Lloyds assumed social distancing and lockdown measures through 2020, as well as the forecasts for the drop in gross domestic product globally.

“What makes COVID-19 unique is not just the devastating continuing human and social impact, but also the economic shock.” Lloyd’s Chief Executive John Neal said.  “Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”

 

What Cruisers Need to Know About Travel Insurance After COVID-19

ST. PETERSBURG, Fla.May 6, 2020 /PRNewswire/ — Major cruise lines have announced they plan to resume sailings as early as August 1. For travelers planning to book a cruise post-COVID-19, travel insurance comparison site, Squaremouth.com, explains what they need to know about travel insurance.

Coverage for Contracting COVID-19 Still Available

Travelers booking cruises now, or keeping their travel plans, can still purchase a policy for COVID-19 concerns, however, coverage is limited, and varies by provider.

As of May 6, 2020, Squaremouth.com reports five travel insurance providers that offer coverage if a traveler contracts COVID-19 while cruising. These policies include emergency medical and medical evacuation coverage if a traveler contracts the virus while on the cruise and need to receive medical care or be medically evacuated.

As of May 6, 2020, there are four travel insurance providers on Squaremouth.com who include trip cancellation coverage if a traveler contracts coronavirus, or is quarantined, and unable to travel as planned.

Being Denied Boarding Due to Cruise Line Screenings May Be Covered

Previously, cruise lines denied boarding to travelers who had a fever or had recently traveled to a destination considered high-risk for the coronavirus. When cruising returns, it is possible these regulations will continue. If a traveler is not allowed to board their cruise because they have a fever or are sick, they may be covered to cancel their trip if they receive documentation from a doctor. However, if a traveler is denied boarding because of a recent visit to a risky destination cancellation coverage may not be available.

Cancel for Any Reason Is Best Option for Cruisers With Cancellation Concerns

Many of the unprecedented impacts on travel related to COVID-19 are not covered by standard insurance policies, like travel bans and border closures. The best cancellation option during this time of uncertainty around travel is a Cancel for Any Reason policy. This optional upgrade can reimburse travelers 75% of their trip cost and is the only option that allows travelers to cancel their trip for any reason not covered by a standard policy, including travel bans or fear of traveling due to coronavirus.

It is important to note that travelers who purchase Cancel for Any Reason policies must cancel their trips 2-3 days prior to departure in order to be reimbursed, so a last-minute cancellation, such as being denied boarding at the cruise port, would be too late.

TRAVEL INSURANCE INFORMATION FOR COVID-19

The Traveler’s Guide to Travel Insurance for COVID-19 was created to inform travelers about their insurance options during the coronavirus pandemic.

The Coronavirus Pandemic Current Event Center includes answers to frequently asked questions and providers’ position statements. These resources are updated daily as the situation evolves.

ABOUT SQUAREMOUTH

SQUAREMOUTH compares travel insurance policies from every major travel insurance provider in the United States. Using Squaremouth’s comparison engine and third-party customer reviews, travelers can research and compare travel insurance policies side-by-side. More information can be found at www.squaremouth.com.

SOURCE Squaremouth

http://www.squaremouth.com

US: Administration offers plan to cover COVID care for uninsured

By Ricardo Alonso-Zaldivar

THE ASSOCIATED PRESS

WASHINGTON _ The Trump administration announced a plan Wednesday to start paying hospitals and doctors who care for uninsured patients with COVID-19, but Democratic lawmakers and health industry groups are likely to press for more.

Under the approach detailed by Health and Human Services Secretary Alex Azar, hospitals and doctors would submit their bills directly to the government and they would get paid at Medicare rates.

Uninsured people would not be liable for costs, and health care providers would not have to ask any questions about a patient’s immigration status, an issue that’s been cited as a barrier to care in communities with many foreign-born residents.

“This says if you don’t have insurance, go get taken care of  we have you covered,” Azar said in an interview.

The money will come from a pot of $100 billion that Congress has approved to provide relief for the health care system, which is trying to cope with the high cost of coronavirus care while facing a cash crunch because elective surgeries and procedures have been put on hold. For COVID-19 patients who are covered by health insurance, hospitals and doctors accepting money from the relief fund would have to agree to not to send “surprise” bills for out-of-network services.

COVID-19 treatment for the uninsured could cost from $14 billion to $48 billion, according to a recent estimate from the nonpartisan Kaiser Family Foundation.

Azar said the administration is not providing an estimate on what its plan will cost, but he is confident it will fit within the $100 billion allocated by Congress. Lawmakers are finalizing another coronavirus relief bill, expected to add $75 billion more for the health care system.

Democrats and some health industry groups say the relief money approved by Congress should go directly to health care facilities, and the administration should cover the uninsured by expanding programs such as Medicaid and the Affordable Care Act. An HHS press release describing the plan for the uninsured says payments for their care would be made “subject to available funding.”

About 28 million people were uninsured before the pandemic hit, and that number is expected to rise sharply. Consultants at Health Management Associates estimate that 12 million to 35 million people could lose workplace coverage in the economic shutdown aimed at containing the spread of the coronavirus.

The plan for the uninsured was part of a broader announcement by the government detailing a second round of economic relief payments to hospitals, doctors and other health care service providers.

Before Wednesday’s announcement, $30 billion had been distributed. Additional funds now being released include:

_ $20 billion in payments across a range of health care facilities.

_ $10 billion targeted to coronavirus hot spots; New York will receive $4.4 billion.

_$10 billion for rural health clinics and hospitals

_$400 million for Indian Health Service facilities.

Azar said additional allocations will be announced for nursing homes, for hospitals and doctors that rely on Medicaid, and for dentists.

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