Image: The USA 2020 rankings feature firms specialising in several different fields of insurance law

A pivotal period in establishing the scope of insurance coverage:

While the true extent of the economic fallout from the ongoing COVID-19 pandemic remains to be seen, it now appears certain that a significant burden will be placed on insurers to pay out unprecedented sums in claims to struggling businesses. Policyholders across a wide range of industries are turning to their insurers in the hope of pay-outs to maintain cashflow, pay workers’ salaries and stabilize increasing financial uncertainty. With massive sums at stake, insurance industry figures are warning of an existential threat to the industry as a whole, as insurers struggle to cope with the sheer value of losses being claimed. In what is shaping up to be a pivotal moment for many businesses, clients are turning to law firms to enforce insurance coverage for the uncertainty that lies ahead.

Reports are emerging of large numbers of business interruption claims being denied across the industry, as insurers assert that pandemic risk is not covered under a typical business interruption policy, and while business interruption and event cancellation claims are among the most immediately pressing being filed, commentators expect that policyholders will seek coverage across a wide variety of lines. Despite guidance issued by the SEC in mid-March to alleviate certain requirements for directors during the pandemic, significant Directors & Officers liability claims will arise as a growing number of companies struggle with solvency, and shareholders allege mismanagement and a mishandling of company responses to the outbreak.

Countless other lines of insurance are likely to be pursued by businesses seeking indemnification from the economic upheaval wrought by the virus. As numerous companies are forced to lay off or furlough staff, Employment Practices Liability coverage will be sought out by companies facing claims, including wrongful termination and discrimination. Furthermore, the massive disruption to global economic activity and international trade will inevitably lead to businesses seeking protection of debt non-payment under Trade Credit Insurance policies, and with the widespread shift to remote working, the risk posed by cyber breaches increases, significantly emphasizing the need for effective coverage for cyber attacks.

The implications of an uncertain regulatory and legislative environment:

The regulatory and legislatorial implications of the emerging crisis remain to be seen, but early evidence suggest that some state legislators will seek to push through bills requiring insurers to pay out to businesses affected by the pandemic. For example, New Jersey’s Draft Bill A-3844 would retroactively provide indemnification to businesses of 100 employees or less with a policy in place as of March 9th, the date a state of emergency was announce in New Jersey, in a move that may well ease the concerns of policyholders currently facing drawn out disputes with their insurers.

As both policyholders and insurers seek out legal counsel, it now seems inevitable that large numbers of these disputes will end up in court. Already, federal class actions are emerging, with plaintiffs having recently filed suits against several prominent insurers for denial of policy claims.

As a means to assist businesses and in response to the inevitable influx of insurance disputes, numerous firms, both policyholder and insurer-focused, are establishing specialized resource centres to assist clients in what is proving to be one of the largest and most costly legal battles in living memory. From general guidance on what to expect from regulators and legislators to in-depth analysis of potential policy interpretation, both traditional insurance powerhouses and smaller, plaintiff-focused firms are gearing up to assist clients in what looks increasingly likely to be long-running, complex litigation.

Other helpful resources:

Our Global Practice Guides provide expert commentary on legal issues from Chambers ranked lawyers around the world. For more information on how insurance laws apply across different countries around the world, including the USA, please visit our Insurance and Reinsurance Global Practice Guide.

To browse related Chambers rankings, we have a range of Insurance law categories in our USA Nationwide Rankings:

Insurance Disputes (for Insurers)
Insurance Disputes (for Policyholders)
Insurance Transactions and Regulatory Issues

Alternatively, you can select the state or location relevant to you via our Chambers USA 2020 homepage.

All these resources are available for free via