The Pandemics power over Insurance Law.

The Pandemics power over Insurance Law.

The pandemic disrupted many practices. But the specific focus of what it did to insurance law made me curious. The practice of law around these policies and claims after the pandemic was interesting. We know of businesses that never bounced back despite the precaution and the policies they had. 

What could have contested and come between them? How could an agreement between two parties be just as strong despite what has been previously established?  Someone carries the risk of loss to another party with a contract and a premium. 

I knew someone who worked in this field who knew the specifics and was happy to inform me of everything. Her concentration and expertise are in commercial consumer insurance policies. She knows the business and the insurance company laws for this state. This is insurance intentionally written to the specific business, not the category.  Her preference is due to being uncomfortable with personal insurance and potential losses in someone’s life or their life. She wanted a different responsibility and did well for herself. 

There are three specific forms of insurance law being practiced. Claim handling, insurance regulation, and consumer policies. There were thriving and downturns regardless in different cases thanks to the pandemic.   

They were all forced to face a devastating impact due to the pandemic. Some businesses that acted as their clients exhausted their savings. Their business interruption insurance was expected to help, but it could not.  People were under the assumption that it could help; unfortunately, it only covers when a business has its assets damaged. The pandemic did not do any physical damage, so there was no payout.  Many were forced to cancel their insurance or have their policies lapse.  And if they could get back into business, they faced higher insurance prices.  

Some businesses could profit and were required to have purchased specific insurance policies. The lawyers needed to be assured they were meeting certain things on the federal and state level while filing everything away. Checking for all requirements in numerous lengthy and possibly delayed field inspections.  Like many in the workforce during the pandemic, they were not close at all to each other while doing their hard work. The isolation made the process drag on with more difficulty. People in insurance law were not considered essential workers despite doing essential work. 

Multiple Insurance companies made refund discounts available for acts of kindness. State Farm did up to 2 billion in refunds out of goodwill. Smaller companies could not do this and eventually were absorbed into their more significant competitors. Unfortunately, it meant fewer insurance carriers were out there as options, especially smaller ones. But plenty of more expensive insurance for consumers to meet with. The mergers complicated things for commercial insurance direct brokers who couldn’t write out specific types of business insurance.  Without those carriers, the insureds have less competition, cost, and risk.  More hardship occurred directly to them because of the pandemic.  A hopeful guess was made that it wouldn’t improve for about three years.  

She shared with me that what she wished remained the same within insurance law. They would be happy to argue for it to return if it came to it. Changes to Business Operations Need Changes to Commercial Insurance Policies.  Someone’s current insurance package has the risks for the original purchase, not for any expansion in clientele or expansion. The untrue idea is that the insurance would already be there for any additions made from the expansion and clientele.  They need to get separate policies for what was added on, even if it meant the business name didn’t change at all.  Their commercial insurance policy should be modified to accompany the new business operation when needed. The insurance carrier isn’t always required to add on the new risk exposure, but they will search for an insurer to protect the customer’s additional business operations.  That task did not exist before the pandemic, and it was easier to add new operations to pre-existing policies. That law caters not to the consumers but to the insurance carriers.  

What was filed will stay finalized, the pandemic has done damage. The federal and state governments wouldn’t reverse this, revoking any filing. The prices of insurance will continue to rise for a time. It’s puzzling for those not directly involved and troubling for those who are in some instances. People with businesses should have insurance, but carefully research their policies instead of assuming. I don’t speak as an expert but as someone who was walked through the basics and wanted to offer a slight refection.