Since the “coronavirus” was first identified in Wuhan, Hubei Province, China, the World Health Organization (“WHO”) has confirmed that more than 63 million people have been infected with the SARS-CoV-2 virus and nearly 1.5 million people have died from COVID-19.
As SARS-CoV-2 has spread, there have been suspensions and disruptions of factory operations and supply lines; cancellations of and restrictions on conferences, concerts and music festivals, sporting events, theater shows, attractions, and restaurants; and closings of businesses and schools. The economic losses are projected to be at least in the hundreds of billions of dollars with disruptions potentially lasting for two years.
As many insureds around the world have turned to their insurers for reimbursement under pertinent insurance policies, their insurers have largely rejected such claims. In the United States, the University of Pennsylvania’s Covid Coverage Litigation Tracker has tracked the filing of nearly 1,300 pandemic-related insurance coverage lawsuits.
In addition to the many lawsuits filed in the US, it is also anticipated that there will be a significant and parallel uptick in the number of pandemic insurance and reinsurance arbitrations. It is particularly likely that many of these disputes will take place under so called “Bermuda Form” arbitration clauses given the many business interruption policies sold to US insureds by the London and Bermuda-based insurers.
A recent UK Supreme Court decision, Halliburton v. Chubb, highlights some of the issues US insureds can expect when arbitrating insurance disputes, pandemic or otherwise, under the Bermuda Form.