David Goodwin’s commentary was featured in a Daily Journal piece about the 9th Circuit Court of Appeals raising new questions about whether insurance companies must pay for coverage arising from the COVID-19 pandemic.
The COVID-19 pandemic has raised tricky questions for the courts because the damage to businesses was primarily caused by government-ordered closures due to the virus, not by physical damage to the property. Many insurers have prevailed against businesses by citing virus exclusion provisions in their policies.
Some insurance companies didn't have such broad exclusion provisions, leaving them vulnerable in litigation, David said.
"If something rendered a property unsafe, you're entitled to coverage," he said, citing asbestos as an example. "You don't have to be able to see the damage in order for there to be damage covered by insurance."
"If the avian flu turns into the next pandemic, nobody will be covered," David remarked.
David told the Daily Journal he believes the state Supreme Court will answer the question in another case about what counts as a physical loss or damage to a property. But he pointed out that such disputes, while significant for the policyholders and insurance companies involved, are relatively rare, adding that insurance companies that didn't have virus exclusions have added them since the COVID-19 pandemic.
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