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As lawsuits proliferate across the country over insurance claims tied to COVID-19, a federal judicial panel has ordered that lawsuits specific to two insurers be sent to Pennsylvania and New York, Law.com reported. In separate orders on Tuesday, the U.S. Judicial Panel on Multidistrict Litigation ordered coordination of about two dozen lawsuits bringing business interruption claims against Erie Insurance to the Western District of Pennsylvania, near its headquarters. The order builds on prior decisions outlining the panel’s position on whether cases against insurance claims tied to COVID-19 should be coordinated into multidistrict litigation. “This is the latest motion seeking centralization of litigation involving insurance claims for coverage of business interruption losses caused by the COVID-19 pandemic and the related government orders suspending, or severely curtailing, operations of non-essential businesses,” wrote U.S. District Judge Karen Caldwell of the Eastern District of Kentucky, who is the panel’s chairwoman. But the panel, in an unusually lengthy order, contrasted the Erie litigation to its prior decisions addressing lawsuits alleging insurers illegally denied business interruption claims tied to the COVID-19 pandemic. In August, the MDL panel denied a request to coordinate more than 260 business interruption cases together in an industry-wide docket, concluding the lawsuits asserted various state laws and ensnared too many companies with different policies. In an unusual move, the panel gave lawyers in some of the cases a chance to argue whether MDLs could exist against individual insurers, but, on Oct. 2, the panel refused coordination of separate dockets against Travelers, Certain Underwriters at Lloyd’s of London, Cincinnati Insurance and The Hartford.

Regulators, insurers and experts are warning airlines to take extra care when reactivating planes left in extended storage during the COVID-19 pandemic, citing potential pilot rustiness, maintenance errors and even insect nests blocking key sensors, Reuters reported. The unprecedented number of aircraft grounded as coronavirus lockdowns blocked air travel —at one point reaching two-thirds of the global fleet — has created a spike in the number of reported problems as airlines return them to service. The number of “unstabilised” or poorly handled approaches has risen sharply this year, according to the International Air Transport Association (IATA). Such mishaps can result in hard landings, runway overshoots or even crashes. Worried by IATA’s data, insurers are questioning airlines about whether they are doing extra pilot training to focus on landings, said Gary Moran, head of Asia aviation at insurance broker Aon PLC.

A bipartisan group of lawmakers is splitting its $908 billion coronavirus relief proposal into two packages as it prepares to release text today, The Hill reported. The plan will include a $160 billion proposal that ties together the two most controversial elements: more money for state and local governments and protections against coronavirus-related lawsuits. The second proposal will total $748 billion and include ideas that garner broader support, including another round of Paycheck Protection Program funding for small businesses, unemployment benefits, and more money for vaccine distribution, testing and schools. Members of GOP leadership, while saying the bipartisan group has been helpful at finding common ground, argue that a final agreement will need to be hashed out by Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Nancy Pelosi (D-Calif.). Democrats view state and local money as a top priority, and the Senate GOP leader has long called including protections against coronavirus lawsuits a "red line." Read more. 

In related news, ongoing revelations about how big businesses and chains were able to secure hundreds of millions of dollars in funding from the Paycheck Protection Program are shaping discussions in Congress about which employers should be eligible if another $300 billion is approved under another proposed stimulus package. Two leading senators on small-business issues, Marco Rubio (R-Fla.) and Ben Cardin (D-Md.), agree that a new round of funding should permit businesses to receive a second PPP payment. More funding would also likely require businesses to show that they’ve lost income due to the pandemic to receive loans, which turn into grants if used properly. Read more. 

Additionally, House Majority Leader Steny Hoyer (D-Md.), indicated yesterday that Democratic House leadership was open to accepting a COVID-19 relief deal with Senate Majority Leader Mitch McConnell (R-Ky.) that doesn't include aid to state and local governments, The Hill reported. "I mean, I think we need to get an agreement, and we need to get this bill passed," Hoyer told CNN's Abby Phillip during an interview on "Inside Politics." He added, "If we can get [state and local assistance], we want to get it, but we want to get aid out to the people who are really, really struggling and are at great risk." Read more. 

Since COVID-19 sparked government-ordered shutdowns in March, judges have dismissed more than four times as many business-interruption lawsuits as they’ve allowed to proceed, according to a preliminary analysis by the University of Pennsylvania Law School. But some plaintiffs are finding weak spots in the industry’s legal defenses, Bloomberg News reported. Christopher Walker, an Orlando doctor, is one of them. Though his policy — like many — contained a provision that Sentinel Insurance Co. contends excluded virus claims, Walker’s lawyer argued that the language used was ambiguous. A federal judge agreed, keeping the case alive after Sentinel sought a dismissal of the suit brought on behalf of Walker’s practice, UroGyn Specialists of Florida. The stakes are high for thousands of businesses. The outbreak has led to a surge in U.S. bankruptcies, including rental-car company Hertz Global Holdings Inc. Century 21 Stores said that it couldn’t survive after its insurer denied its business-interruption claim. But the pandemic is also squeezing insurers. In the second quarter — after the initial shutdowns — Chubb Ltd. reported $1.16 billion in COVID-19 losses. Munich Re said this month that coronavirus losses keep growing. Overall, the industry could face at least $100 billion in total underwriting losses from the pandemic, Lloyd’s of London predicted in May.

Faced with the worst business interruption in living memory, the insurance giants have, by and large, refused to pay business-interruption claims, Bloomberg News reported. U.S. plaintiffs’ lawyers have filed more than 1,100 complaints against insurers, according to a tally by Tom Baker, a law professor at the University of Pennsylvania. Business owners from small restaurants to major retailers say that they could go bankrupt unless they’re paid. Insurance companies say the payouts could cripple them — one industry estimate looking at just U.S. small businesses with fewer than 100 employees places the total monthly cost of reimbursing their pandemic losses at between $52 billion and $223 billion. The dispute is also playing out in Congress and state legislatures, where bills have been introduced requiring insurers to pay for pandemic-related losses. “The word ‘unprecedented’ is probably overused in this, but I don’t think I have another word for it,” says Henry Daar, an executive vice president who oversees property claims for insurance broker Willis Towers Watson. “There have been huge insurable events in the past, with billions of dollars at issue. All of those involved situations that affected a discrete area and a discrete number of companies. This pandemic has affected everybody.” 

Retailers, pharmacies, liquor stores and other merchants across the U.S. are gobbling up insurance that protects buildings from damage caused by societal unrest, worried about possible street violence after the U.S. presidential election, insurers and brokers told Reuters. Many shops and offices are facing double-digit premium hikes for such policies but buying them anyway because the cost of not doing so might be higher, industry sources said. Sales of commercial policies that cover damage from societal unrest in the United States have already doubled in October from September levels, insurers and brokers said. That is partly because some providers, mainly in the Lloyd’s of London marketplace, stopped including “strikes, riots and civil commotion” coverage within general property policies for businesses such as retailers and pharmacies that were already hard-hit by civil commotion, forcing them to buy separate insurance, said a person familiar with the matter, who was not authorized to speak to the media about client policies. 

This time last year, shoppers on Chicago’s Magnificent Mile were waiting for Louis Vuitton to debut its whimsical holiday window decorations. Now those same windows are hidden behind a wall of wood panels painted bright orange, Reuters reported. While still open for shoppers, stores like Gucci and Nordstrom are also boarded up after looters targeted the city's famed retail district in the spring and summer, when protests gripped more than 100 U.S. cities. As security experts warn that the U.S. presidential election could spark renewed civil unrest, those stores remain clad in plywood as retailers seek to keep property and employees safe in the event street violence flares anew. Aon Plc AON.N, the world's largest insurance broker, told Reuters the majority of retailer clients it surveyed are considering boarding up stores because they are worried about looting around the election. Aon executive MaryAnne Burke said about 70 percent of these retailer clients did so during protests in May and June.