Ominous Signs from the CEO of Chubb Insurance Concerning Business Insurance Claims

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Having seen the reaction of insurers to a number of “crises,” both real and imagined, it did not surprise me to read an op-ed by the CEO of Chubb Insurance in the Wall Street Journal.  In the piece, the CEO seems to foreshadow what we need to expect from an industry that routinely delays and denies claims on the insurance policies people have purchased to mitigate risk of a large loss.  The insurance executive argues that “excessive” insurance litigation in the face of the COVID-19 pandemic will hurt the economy.  I have seen this argument recycled every time the industry has to pay on promises it has made to individuals and businesses.

Chubb insurance is a large commercial carrier marketing itself as a business insurer, providing insurance for all types of company needs.  A common type of coverage is what is known as a business continuation policy.  It provides coverage in the event that the company cannot continue functioning for reasons negotiated in the insurance contract.  One common coverage clause is in the event that the business is shut down by governmental declaration of an emergency.  For those of us who have seen the denials for property damage after hurricanes, this pattern is foreshadowing and ominous.

Knowing that the insurance company is likely to have a lot of exposure, the industry is attempting to change opinion and laws to favor them if and when their insureds are forced to file lawsuits and litigate to have claims on their policies paid.  I agree when he said that lawsuits are not the answer.  The answer is for legitimate claims to be timely and correctly paid.  Failing that, a lawsuit is a business owner’s only choice.

The insurance company alone determines if a lawsuit is necessary to pay legitimate business interruption claims.  The posture of Chubb’s CEO worries me because it presupposes that legitimate claims will be filed, delayed or denied without reason, and lawyers will have to file suit to collect.  The argument that this is bad for the economy does not take into account that when businesses are unable to timely collect in the event that they insured against occurs, it is often catastrophic to those companies’ ability to stay in business and keep their workers employed.  In short, denied legitimate claims are worse for the economy than forcing an insurance company to pay its debt.

At the McCraw Law Group, we can help you determine if your business continuation policy language creates coverage that your carrier must pay.  In the event that you or your business is wrongfully denied coverage or if the insurance company strings you along and does not make any finding, we can help prosecute these cases and force large insurers to pay what you agreed upon.