Client Alert: COVID-19 Claims: Single or Multiple Occurrences?

As untold numbers of COVID-19 insurance claims are submitted on a daily basis, insurers and reinsurers must prepare for busy times ahead.  The COVID-19 pandemic has the potential to present many novel coverage issues for reinsurers and insurers, such as what constitutes physical property damage, whether pollution extensions and exclusions will apply, how event cancellation and infectious disease endorsements will affect claims, the application of civil authority coverage extensions, and which of the various kinds of claimed COVID-19 damages could potentially be covered.  The pandemic also presents circumstances unique in modern life that could affect insurance and reinsurance claims, such as numerous statewide closure orders, multiple waves of virus outbreaks that are months apart, and the potential for re-contamination.  

This Client Alert, written by Peter Steffen and John O'Bryan, examines an important quantum aspect of the current crisis that may affect reinsurance claim handling: assuming a policyholder can establish coverage, whether COVID-19 claims will be considered as a single occurrence or as multiple occurrences both on the direct side and the reinsurance side.