The coronavirus pandemic has opened up heated discussions about how the law should function in times of crisis. Let’s leave the more complicated topics alone for now, and focus on possibly the most critical priority in the government’s response to the pandemic.
For sure, there’s a lot going on in the insurance industry. The pandemic has had a serious effect on the country’s economy. So, let’s first start with how the industry is negotiating the crisis and how the law itself is keeping up.
The insurance industry in the midst of the pandemic: At a glance
There’s no question that the pandemic could bring massive disruption to the insurance sector, especially in business and healthcare coverage. Deloitte, for one, pointed out how the insurance industry is well-prepared for a pandemic of this magnitude.
However, the financial impact will still be significant, while entire economies are put on hold.
Accenture, on the other hand, is seeing very serious implications as insurance companies raise their operational expenses and premium reductions are almost inevitable. As much as they support the people and organizations they insure, insurance companies will still need to keep themselves from sinking as the economic fallout from the pandemic becomes clear.
Are insurers still obligated to make payouts? What legal remedies should policyholders use in order to access their claims? What does the post-pandemic future spell for lawyers who work in the area of insurance litigation?
If you plan to fight on any of these terms, what do these changes spell for people who are trying to hire a homeowner’s insurance or personal injury lawyer? It seems too early to tell but recent developments show how the pandemic is going to transform the legal side of the insurance industry.
Deadlock over business insurance payments
Legislators are expecting insurers to make payouts to policyholders. But here’s where it gets complicated: Some insurers in the US are in no position to make such payouts since pandemics are not covered by their policies.
In a Financial Times article, insurers at the state level refuse to approve coronavirus-related claims for business shutdowns. Pandemic coverage is excluded from the terms they offer to clients. Aside from that, a lawyer from top casualty insurer Chubb says that making payouts can cause insurance companies to collapse. They will be making payments for specific risks that are not calculated into their policies.
Right now, lawyers and legislators are in a quandary over what constitutes a risk that could cause a business to go bankrupt.
In the meantime, business insurance lawyers will have their hands full in the coming weeks as clients are looking to recover financially from the pandemic through business interruption claims.
What’s in store for health insurance holders?
Health insurance policyholders will still need assistance when it comes to disputing claims and securing medical reimbursements. Such legal hurdles are easily overcome by attorneys who focus on that area of law.
Then, there is also the issue of providing access to those who cannot afford adequate healthcare. The organization Health Law Advocates is pushing for comprehensive healthcare coverage, ensuring that people who are hard up can still enjoy life-saving services without due discrimination.
For now, the government is providing all sorts of relief to people who are vulnerable to the current health crisis. From postponed premium payments to waived fees, insurers cooperate as much as they can to help everyone weather this storm.
No one knows exactly how the coronavirus pandemic will end. But, when it comes to confronting legal obstacles during a crisis, people will need to have the right professionals. That way, they will always remain secure no matter how the insurance market is performing.