Legal Focus: Coronavirus-related lawsuits may present issues for reinsurers

Jack Gordon and Mark Leimkuhler authored an article in Insurance Day discussing potential issues for reinsurers relating to the coronavirus crisis. 

With coronavirus poised to affect nearly every sector of commerce, it may only be a matter of time before it knocks on the doors of reinsurers. Much of the discussion concerning direct insurance has focused on business interruption coverage under first-party policies, but just as the number of coronavirus infections exploded from an initial handful, so too we may expect a growing number of lawsuits potentially implicating liability coverages in the US.

On the property side, we also may be seeing the start of a trend of bad faith claims against insurers. Both areas may present issues downstream for reinsurers.

On the casualty side, what began as a handful of lawsuits against Princess Cruise Lines by passengers quarantined on the Grand Princess off the coast of San Francisco has evolved into a putative class action against Carnival.

A class action lawsuit has also been filed against another Carnival line, Costa Cruise, on behalf of passengers on two successive Costa Luminosa voyages that departed from Fort Lauderdale. Although some passengers allegedly contracted Covid-19, others claim to have suffered emotional distress through exposure to the risk of physical injury. The viability of these claims and how direct insurers respond remain to be seen.