Webinar 3 – Insurance
The COVID-19 crisis has led to policyholders reviewing the nature and extent of insurance cover that they have available, which might respond to damage that they have suffered.
Cover will turn on the specific terms of the relevant policy and underlying facts. Insures have come under both media and political pressure to respond quickly to these claims, but as the Chairman of Lloyd’s of London is reported to have said in the Financial Times. The insurance industry could be “in jeopardy” if it was forced to pay out for Covid-19 claims that it never intended to cover.
Key types of Insurance Cover that are affected are:
- Business Interruption Insurance
- Employer’s liability cover
- Contingency/event cancellation cover
- Cyber risks
- Trade Finance/Trade Credit and
- Even if the ruling were to favor policyholders, claimants will still face hurdles and lengthy discussions over how much they are owed. That means any potential payments are likely to be months away. “If the court says that the policies trigger and exclusions don’t apply, you’ve still got a long way to go to get paid,” said Bruce Hepburn, chief executive of advisory firm Mactavish. “The FCA is effectively resolving ambiguity over some wordings on some contracts.” Will the FCA case actually help to clarify BI cover generally, or only the specific policies under review in the case?
- Given the FCA test case only deals with BI related policies, what happens with other COVID-19 impacted coverage such as D&O cover?
- Can Insurance brokers be called upon for not advising on appropriate insurance cover to deal with Pandemic risks?
- Mr Hepburn of Mactavish warns customers will take far more care when buying insurance. “Businesses will scrutinise their policies as they never have before,” he said. “I think the industry is heading towards a much bigger problem than they have now.” How will insurers’ policies change on renewal? Will pandemics be excluded? Will cover be available at additional cost?
- Is there room for policy holders to negotiate these coverage issues with the insurer or will insurer’s be reluctant to agree settlements, without a judgement?
- Under what circumstances have you seen insurers’ looking at a pragmatic settlement resolution to policy issues, or do they rely on legal precedence to guide them?
- Might public pressure and threats of legislation as well as corporate social responsibility drive a different approach?
- Switzerland’s Helvetia Insurance, for example, has offered to pay companies in the food industry even though it says that coverage for pandemics is excluded in its epidemic insurance policies. Thomas Buberl, the chief executive of Axa, has called on dissatisfied customers to negotiate rather than litigate. Does mediation provide a possible avenue for resolving these coverage issues, without litigation?
- How does the Cabinet Office Guidance of 7 May asking business to act responsibly when looking at COVID 19 related disputes, fit into resolving these policy issues?
- How do you persuade parties under the circumstances we discussed, to mediate?
- Does mediating virtually provide the same benefits as mediating face to face?
- Final remarks.
View the full recording of the webinar below
Richard Wise, Partner – Addleshaw Goddard LLP
Richard is partner in Addleshaw Goddard’s Litigation Group specialising in insurance and international commercial arbitration.
His insurance practice focuses on the representation of major national and multinational policyholders. His experience includes the full range of business insurance.
Steve Clarke (mediator)
Steve is a practising mediator and insurance industry professional. Steve began his career at Alexander Howden & Swann (now Aon) and subsequently held senior broker positions within the insurance industry until he became Executive Director in charge of International Reinsurance Claims at Willis. He moved on to head the Reinsurance team for Lloyd’s Claims Office and then went on to several Lloyd’s Managing Agencies.
Jane Player (Mediator)
Jane is a member of Int Arb and a leading international mediator. Jane was formerly a partner at King & Spalding, and before then co-head of International dispute group and head of head of disputes at Bird & Bird and DLA Piper respectively. Her focus lies in commercial and contractual claims including insurance, construction and fraud as well as project disputes within a wide variety of sectors.
Wolf von Kumberg (Arbitrator and Mediator)
Wolf is also a member of Int Arb, mediator and arbitrator. He has over 30 years’ of experience in international business having been Assistant General Counsel to Northrop and before that to Litton Industries. Wolf has experience across a wide variety of sectors including aviation, insurance and reinsurance, investor state and commercial disputes.
About Int Arb
Int Arb Arbitrators & Mediators is a specialist set of independent arbitrators and mediators with experience in substantial disputes across the globe. Our expertise lies with aviation & aerospace, investor state, construction, engineering & infrastructure, and corporate and commercial disputes including technology and telecommunications, banking, transport, IP, M&A, Insurance and re-insurance, mining, energy, oil & gas.
The dedicated and experienced support management team are on hand to talk through and have detailed conversations with our clients in order to understand the requirements of each dispute(s) – guiding you through the process of appointment and making suitable recommendations of mediator or arbitrator.
Managing Director: Sam Carter
International Arbitration Centre (IAC) and IAC Online
Virtual Arbitration Portal & Hearing Facilities – IAC Online provides a secure virtual portal and unique navigation dashboard. Our virtual hearing room streamlines the proceedings with the focus on the Tribunal, lead advocates and witnesses. It also allows for all involved to attend (support lawyers, clients etc) without congesting the screen.
IAC Online provides easily accessible, physically separated private breakout rooms for each party and tribunal to use throughout in the same way you would have for a physical hearing.
During this time at the IAC we are regularly holding semi-virtual hearings. This due to our infrastructure and facilities, we are one of the only venues in London who can sensibly operate social distancing measures and keep all involved as safe as possible going forwards.