A Primer on COVID-19 and Insurance

Abstract

The ongoing coronaviris (COVID-19) pandemic and varients is the most devastating and disruptive forces in recent history. The Covid-19 pandemic will lead to numerous lawsuits involving insurance coverage and commercial disputes. A party whose operations are compromised by the pandemic may have defenses such as impossibility and force majeure.

However, the consensus or majority of cases hold that a loss or damage must be caused by a direct and tangible physical injury to the insured property. In most jurisdictions physical loss does not cover a virus because a virus does not result in tangible damage to property. Notwithstanding an argument can be made that the words physical loss could include a business's inability to use the property during the pandemic.

To help mitigate the financial crisis created by the Covid-19 pandemic, the federal government has issued guidance relating to employee benefit plan operation and administration.

The Coronavirus Aid Relief & Economic Security Act (CARES) provides for substantial financial and administrative relief to participants, sponsors and administrators of certain employee benefit plans. The IRS has clarified and expanded upon the relief offered in the new law.