CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Archive for the ‘Coronavirus – Insurance Coverage and Extra-Contractual Liability’ Category

Congress Considers Reinsurance Program for Business Interruption Losses Due to Coronavirus

Posted on: April 9th, 2020

By: Zach Moura

Business interruption coverage typically requires that there be direct physical loss of or damage to property, and many business interruption policies contain virus exclusions. But there are currently a number of legislative proposals at the state and federal level seeking to expand business interruption coverage to cover pandemic-related business losses more generally, both prospectively and retroactively.

The House Financial Services Committee has proposed a bill that aims to create a reinsurance program similar to the Terrorism Risk Insurance Act (TRIA), but for pandemics. The Pandemic Risk Insurance Act (PRIA) would extend business interruption insurance to cover any loss resulting from a public health emergency arising from an infectious disease outbreak or pandemic. According to Chairwoman Maxine Waters, the PRIA “would create a reinsurance program similar to the Terrorism Risk Insurance Act for pandemics, by capping the total insurance losses that insurance companies would face.” Like the TRIA, the PRIA is forward-looking and seeks to safeguard businesses against future losses.

The PRIA would create the Pandemic Risk Reinsurance Program within the Treasury Department. Participation in the program would be voluntary and involve payment by carriers of a reinsurance premium to the Treasury, based upon actuarial calculations and program administration costs.

Under the current draft of the PRIA, the total amount insurers would have to pay out against a public health emergency is capped at $500 billion per year. The discussion draft of the PRIA offers several possibilities for establishing a qualifying public health emergency, such as a declaration under the Public Health Service Act, a presidential declaration under the Stafford Act, or certification by the Secretary of the Treasury.

In the event of a public health emergency, participating insurers would be obligated to pay out for covered losses up to 5% of their direct earned premiums from the preceding calendar year as a deductible. The program would reinsure the rest.

A professor at Butler University in Indiana who helped craft, outline, and lobby for the PRIA explained to Inside Indiana Business that the PRIA is “just a more efficient way for the government to backstop the insurance industry so that this coverage can exist in the private marketplace.” He believes that the PRIA could “turn the market for [business interruption] coverage back on.”

There is some question as to whether the proposed size of the program is sufficient. Some prominent investors have recently predicted that the COVID-19 pandemic could end up costing U.S. businesses as much as $4 trillion, 8 times the proposed cap on the program.

Nonetheless, some industry insiders are in favor of creating a backstop like that proposed under the PRIA, noting that the insurance industry is in the best position to offer this coverage as it has the experience to properly price it.

We will continue to monitor developments related to the PRIA and provide updates as they occur.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include COVID-19’s impact on finances and loans, the FFCRA, the CARES Act and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

Plaintiffs and Lawmakers Raise Bad Faith Issues in COVID-19 Claims

Posted on: April 3rd, 2020

By: Adrianna Michalska and Eric Retter

Every American is reminded daily that Coronavirus spreads easily and quickly. So has the impact on the insurance industry. How fast? Less than a month after the first U.S. death attributed to the virus on February 29, an insurer already faces a coverage and bad faith lawsuit over a COVID-19-related claim.

While the speed with which the first bad faith case arrived may be unexpected, there was little doubt such cases were coming. Other lawsuits hinted at such claims weeks ago, and state efforts to require carriers to pay business interruption claims—regardless of whether their policies actually cover such claims—may also lead to extra-contractual claims.

Restaurants are leading the charge

Several restaurants have sued their insurers, seeking declaratory judgments for potential business interruption claims in the wake of COVID-19. But Big Onion Tavern Group, LLC et. al. v. Society Insurance, Inc., filed March 27 in the Northern District of Illinois,features the first actual denial of such a claim, which prompted the boilerplate bad faith claim.

On March 15, 2020 Illinois Governor Pritzker ordered all restaurants, bars, and movie theaters to close. Executive Order 2020-07 posits that “frequently used surfaces in public settings, including bars and restaurants, if not cleaned and disinfected frequently and properly, also pose a risk of exposure.” One of the plaintiffs in the Big Onion case, Legacy Hospitality, operates a Chicago restaurant called The Vig. On March 20, Legacy asked Society Insurance to pay a claim resulting from the shutdown. Society denied the claim three days later. The denial stated that there was no direct physical loss or damage to property triggering either a business interruption or civil authority claim (Society also denied claims for spoilage and contamination in the denial letter, attached as an exhibit to the Complaint).

The other restaurant owners who are plaintiffs in the Big Onion do not attach denial letters as exhibits, but each alleges that its claims were similarly denied. All of the plaintiffs rely on an email from Society’s CEO and President dated March 16, averring that it indicates the insurer’s intent to deny all such claims without investigating them. (The last page of the email states that it is a “TEST EMAIL ONLY,” sent for the purpose of testing a draft message.)

Suits seeking declarations that these types of losses are covered have been filed in other jurisdictions. On March 30, our colleague Katie Cusack  reported on a declaratory judgment action that was filed in mid-March in a Louisiana state court by a New Orleans restaurant seeking a declaration of prospective coverage under a business interruption policy based upon events and losses that are not alleged to have occurred. [Cajun Conti, LLC, et al. v. Certain Underwriters at Lloyd’s London, et al., Civil District Court for the Parish of Orleans, Louisiana].

Political pressure mounts

On the same day the Cajun Conti suit was filed, New Orleans TV station WWL4 reported that  Mayor LaToya Cantrell filed an emergency declaration in the same court. That order states that COVID-19 “caus(es) property loss and damage in certain circumstances.” If there were any doubt about her intentions to influence insurance payments, Mayor Cantrell announced that “[w]e have also been very aggressive as it relates to business interruption support and … insurance. We understand pandemic infections are not included in their insurance coverage, which makes this a priority for my administration to push for these reasons at the state and federal level.”

Mayor Cantrell is not the only politician aggressively pressuring insurers. New Jersey introduced a proposed bill in mid-March that would force insurers to cover business interruption insurance even if they expressly excluded virus and bacteria losses in their commercial property policies. Several states have proposed similar legislation, including New York, where Assemblyman Robert C. Carroll planted the notion that it would be “unconscionable” for insurers to rely on such exclusions after they received bailouts in 2008.

Massachusetts has also proposed such a law. Bill SD.2888 would construe any business interruption policy to include among the covered perils loss of use and occupancy, and business interruption directly or indirectly resulting from COVID-19. The bill would require this construction even when the policy contains express language excluding any losses “on account of (i) COVID-19 being a virus . . . ; or (ii) there being no physical damage to the property of the insured or to any other relevant property.”

Proponents of the Massachusetts bill go a step further by trying to tie the bill to Chapter 176D of the General Laws. Chapter 176D concerns Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance. Along with Chapter 93A, it provides relief for bad faith handling of insurance claims. Together, the statutes allow for possible recovery of attorneys’ fees and even double or treble damages for knowing and willful violations.

To date, no state has yet passed bills into law that seek to override policy provisions precluding coverage for business interruptions claims associated with COVID-19. FMG will continue to monitor these bills along with other political efforts that impact the insurance industry and the construction of such provisions in particular.

The FMG #Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include employment issues, the real-world impact of business restrictions, education claims and more.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include employment issues, the real-world impact of business restrictions, education claims and more. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

More Restaurant Owners ask Courts to Find that COVID-19 Has Caused “Direct Physical Loss” Triggering Business Interruption Coverage

Posted on: April 1st, 2020

By: Renata Hoddinott and Isis Miranda

Famed chef Thomas Keller’s restaurant groups sued two insurers in Napa County Superior Court last week, seeking a declaration that the policies cover business interruption losses incurred because of a Shelter-at-Home Order. In the lawsuit, two of the Keller group’s Yountville restaurants, The French Laundry, a Michelin three-star winner, and also-acclaimed Bouchon Bistro, seek a determination that Hartford Fire Insurance Company and Trumbull Insurance Company (collectively “Hartford”) are obligated to pay substantial business interruption losses.

Those losses occurred, according to the Complaint, after the Napa Health Officer issued the Shelter-at-Home Order on March 18, 2020, that directed all residents to stay at their homes and all non-essential businesses to halt operations. As a result of the order, the Keller group temporarily shuttered the two restaurants and furloughed more than 300 employees.

During the COVID-19 pandemic, most states have ordered restaurants to close their dining rooms, including in California, Nevada and New York, where Keller operates several restaurants, as well. While some restaurants have shifted their operations to takeout and delivery, many—for logistical or financial considerations—have elected to closed entirely.

While restaurants and businesses of all sizes are experiencing losses, Keller’s may be greater than others as the nine-course tasting menu at The French Laundry is $325 per person with any selection from its extensive wine list not included in that price.  It is not unusual for dinner for two at The French Laundry to cost $1,000. Thus, Keller’s losses will be substantial.

But will they be covered? Property insurance policies typically require “physical loss or damage” to property. When property is destroyed by fire or storm, that threshold requirement is easily met. But here the alleged “physical loss or damage” from a virus is invisible.

California courts generally adhere to the traditional interpretation of the term “physical,” as requiring some tangible aspect perceptible through the senses. In MRI Healthcare Center of Glendale, Inc. v. State Farm General Insurance Co., a California appellate court concluded that the insured had not sustained a “physical loss” because it failed to demonstrate any “distinct, demonstrable [or] physical alteration” of the MRI machine, which failed after it was turned off to allow for repairs to the hospital for rain damage. The court explained: “For there to be a ‘loss’ within the meaning of the policy, some external force must have acted upon the insured property to cause a physical change in the condition of the property, i.e., it must have been ‘damaged’ within the common understanding of that term.”

In so holding, the MRI Healthcare court relied on another California appellate court case, Ward General Insurance Services, Inc. v. Employers Fire Insurance Company (2003), which found that loss of information stored in a database did not constitute “direct physical loss.” The court in Ward General referred to the dictionary definition of the term “physical” before concluding: “Thus, relying on the ordinary and popular sense of the words, we say with confidence that the loss of plaintiff’s database does not qualify as a ‘direct physical loss,’ unless the database has a material existence, formed out of tangible matter, and is perceptible to the sense of touch.”

The requirement that property must be physically altered or changed to constitute property damage may preclude coverage for business owners looking to their property policies to mitigate their losses. Property policies also typically require that the resulting loss of income was caused by the property damage. Therefore, California courts would need to find that the alleged damage to physical property was the predominant cause of the loss of income, rather than, for example, fear of contagion.

Keller alleges that Hartford issued an all-risk policy to his restaurants, providing coverage for losses from direct physical loss or direct physical damage unless the loss is specifically excluded or limited. The Complaint also alleges that Keller’s policy includes additional coverages in the event of business closures by order of Civil Authority and specifically extends coverage to direct physical loss or damage caused by virus.

Like similar complaints filed in the wake of COVID-19, Keller’s Complaint claims the scientific community has largely recognized the virus as a case of real physical loss. It claims that the virus can remain on surfaces of objects or materials for up to 28 days.

The Complaint also invokes the government’s authority, claiming that the Napa County Health Department explicitly states it issued the Order because of evidence of physical damage to property. The Order provides: “This Order is issued based on evidence of increasing occurrence of COVID-19 throughout the Bay Area, increasing likelihood of occurrence of COVID-19 within the County, and the physical damage to property caused by the virus.”

Typical “Civil Authority” policy provisions provide coverage for business interruption losses stemming from a government order that prohibits access to the insured’s premises. They generally require that lack of access result from “physical loss or damage” to property other than the insured’s premises, which itself resulted from a “covered cause of loss.”

Keller alleges that all access to the restaurant properties is denied as a result of the Order. Notably, however, Keller’s lawsuit does not include his other Yountville eatery, the more casual Ad Hoc, which is open for takeout orders per its website.

A court might also need to address whether the Order “prohibits” access to the affected restaurants and whether the Order was issued because of physical damage to property. Although the Order itself provides that it was “issued based on evidence of . . . physical damage to property caused by the virus,” and Keller alleges that the presence of  COVID-19 constitutes property damage by lingering on surfaces for up to 28 days, California precedent may not support a finding that the property has been physically changed or altered.

Keller seeks a judicial determination that: (1) the Order constitutes a prohibition of access to premises by a Civil Authority as defined in the policy; (2) the Order triggers coverage because the policy does not include an exclusion for a viral pandemic and actually extends coverage for loss or damage due to virus; and (3) the policy provides coverage for any current and future civil authority closures of restaurants in Napa County and provides business income coverage due to physical loss or damage from COVID-19.

Keller’s attorney says the suit against Hartford–and other similar challenges filed by business owners–is intended to establish legal precedent that businesses facing mandated coronavirus closures are covered by their business interruption insurance policies. Keller is not the only restauranteur seeking such a determination relating to the COVID-19 pandemic. Earlier this month, one of Keller’s attorneys filed suit on behalf of New Orleans seafood restaurant Oceana Grill seeking a declaration that its policy with Lloyd’s of London covers “direct physical loss” from “the event of the businesses closure by order of Civil Authority.”

The American Property Casualty Insurance Association has issued a broad statement that it believes most insurance policies—including those with business interruption coverage—do not cover losses stemming from viruses such as COVID-19, and that to “retroactively rewrite existing insurance policies” could put the insurance industry at risk.

Those seeking to evaluate coverage in a specific context must, of course, analyze the language of the specific policies, including, but not limited to, coverage provisions regarding crisis management, business interruption and contingent business interruption, and civil authority coverage.

While similar suits for business interruption losses were filed by insureds following the mad cow disease outbreak, the 9/11 terrorist attacks, and the Ebola virus, the widespread reach of COVID-19 indicates that coverage litigation stemming from it will be equally widespread. FMG will continue to report on coverage issues arising from these and future cases that will undoubtedly be filed in the coming days and months.

UPDATE:

Scratch Restaurants LLC, which operates Scratch Bar and Sushi Bar Los Angeles, sued Farmers Group in the Los Angeles Superior Court on April 1. The Scratch lawsuit asks the Court to declare whether stay-at-home orders and orders restricting in-person dining, issued by Los Angeles and Santa Barbara authorities, trigger Civil Authority and Business Income coverage under their policy.

Unlike some of the complaints reported on in this and other FMG blog posts, Scratch’s does not allege as fact that coronavirus has caused physical damage. Instead, Scratch asks the Court to declare whether it is entitled to coverage if it “can prove that there has been a physical loss and damage to the property in the immediate area of the insured properties.” It alleges that such a declaration will prevent Scratch “from being left without vital coverage acquired to ensured the survival of [its] businesses.” By implication, if nothing else, Scratch is seeking relief for losses that it cannot (yet) prove to be covered.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include the CARES Act, education claims, law enforcement, the real-world impact of business restrictions, and the viruses’ impact on the construction industry. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

Coalition of Insurance and Business Groups Propose the COVID-19 Business and Employee Continuity and Recovery Fund

Posted on: April 1st, 2020

By: Nicole L. Graham and Zachariah E. Moura

A broad coalition has urged the federal government to create a recovery fund for businesses hit hard by the COVID-19 pandemic.

Representatives of 36 trade groups from real estate, insurance, retail and other sectors issued a joint letter to the Trump Administration and Congress asking for rapid delivery of liquidity to impacted businesses—regardless of size, industry or location—to mitigate a larger financial crisis. 

The coalition gratefully acknowledges the loan programs instituted by the CARES Act and the Act’s support for “Main Street” businesses but advises that businesses seeking to avoid an “unprecedented systemic, economic crisis” need more liquidity. 

The proposed COVID-19 Business and Employee Continuity and Recovery Fund (the “Recovery Fund”) would be financed by the government. A special administrator would oversee the fund, with significant oversight and authority to enter into contracts to provide immediate relief to eligible businesses. 

The Recovery Fund would serve to help businesses retain and rehire their employees and meet operating expense obligations during a time when the businesses are unable to fully operate.  Quarantine and shelter-in-place measures, travel restrictions, and social distancing measures have created an unprecedented level of disruption across all industries. 

The letter warned, “[w]ithout broad-based and expeditious federal action, long-term damage to the financial markets, rampant unemployment, and irreparable harm to communities are almost certain.”  The proposed Recovery Fund is modeled after the 9/11 Victims Compensation Fund and is designed to provide short-term and immediate relief to impacted businesses.  Some of the signatories including National Association of Mutual Insurance Companies and International Council of Shopping Centers have issued statements in support of the establishment of the Fund and called for swift action from the government. 

We will continue to monitor developments related to the Recovery Fund and provide updates as they occur. 

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include the CARES Act, education claims, law enforcement, the real-world impact of business restrictions, and the viruses’ impact on the construction industry. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

With the 2020 Drafts in Limbo due to COVID-19, could College Athletes find Coverage under “Loss of Value” Policies?

Posted on: March 31st, 2020

By: Matthew Jones

The effective shutdown of sporting events due to the spread of COVID-19 is having a financial effect on many people in all walks of life.  Perhaps overlooked are college athletes who aspire to have contracts with professional teams. Increasingly, college athletes are insuring their careers against “Loss of Value” to protect the value of future contracts from decreasing below a predetermined amount due to significant injury or illness suffered during the coverage period. These policies are particularly important for athletes during the year leading up to their draft eligibility. Whether delays in the drafts will be covered by these policies is uncertain.

The policies require medical underwriting and may exclude specific pre-existing injuries or illnesses, such as osteoarthritis or degenerative conditions, drug and alcohol use, criminal acts, and mental, nervous or psychological disorders. Insurers first determine an athlete’s eligibility based on projected draft position. Depending on that position, policy limits vary between $1 million and $10 million. The underwriters then set a loss-of-value threshold: If the athlete is drafted below a specific position, and must sign for a lesser amount, the policy may be triggered. If the contract amount falls below that threshold as a direct result of injury or illness, the insurer will pay the difference between the contract’s value and the predetermined threshold.

Injury or illness does not automatically trigger benefits.  Instead, the athlete must tie the injury or illness directly to a decrease in value or lower draft position. Insurers evaluate other issues as well, including off-field conduct, poor performance during the season or at pre-draft events, a rise in the draft value of other athletes, and changes in a professional teams’ needs.

Loss of Value insurance generally applies in the context of injuries and illnesses, but what happens when a season has been forfeited?  The NCAA cancelled all spring sports for the remainder of the season, effectively ending the careers of many senior athletes in spring sports.  While some athletes may look to their Loss of Value insurance policies for protection, the policies may not apply if it the loss is not based on injury or illness. 

If an athlete contracted the coronavirus the analysis is much different.  When the NCAA is considering questions raised by an athlete’s illness it looks at “illness first manifested in the insured athlete during the period of this insurance which requires medical treatment by a physician and has negatively affected the athlete’s skills in a manner that causes substantial and material deterioration in his ability to perform in his occupation.”  It seems clear that coronavirus is as an “illness” under this definition assuming the athlete requires medical treatment, the illness negatively affects the athlete’s skills, and the negative effect causes substantial and material deterioration in the athlete’s ability to perform as a professional. 

In an attempt to help these athletes, the NCAA granted an extra year of eligibility.  But what does such a decision do to those athletes who contracted the virus?  Does it mitigate or diminish the potential losses of the athletes? As with other COVID-related matters, these unprecedented questions will likely need to be resolved through litigation.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include the CCPA, the CARES Act, Education Claims, Law Enforcement and the viruses’ impact on the Construction Industry. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**