Will insurers cover coronavirus-related business losses? We may soon find out
Chicago-based CNA Financial claims its policy doesn’t explicitly rule out virus-related losses
A business insurer’s position that it isn’t required to cover coronavirus-related losses is set to face a legal litmus test.
A Las Vegas-based company with a CNA Financial’s subsidiary’s policy filed a class-action lawsuit against the company in a Chicago federal court on Monday, according to Crain’s.
The company, Vegas Image, owns a distributor of gambling-themed candy and toys. The company argues that its policy doesn’t explicitly rule out losses “from the spread of viruses.”
Conversely, CNA Financial CEO Dino Robusto claimed on Monday that all the company’s policies “have exclusion barring coverage for viruses.”
“Our property policy exclusionary language does not provide coverage for COVID-19, and as such we never collect a premium for it,” he said during a conference call.
Vegas Image wants the court to order CNA to cover losses for all parties that hold its same policy. The outcome could have wider implications for other insurers and policyholders.
Some insurance policies explicitly cover events like coronavirus. Many insurers began excluding pandemic and disease coverage following the SARS epidemic of the 2000s, when many paid millions out in claims.[Crain’s] — Dennis Lynch