Category: Nat Cat comparisons

Business Income Cases Nat Cat comparisons

Lessons from Katrina: It’s a Long Game

Post author By Tom Baker
Post date July 29, 2020

Author: Tom Baker Date: 07.29.20

Ted Le Clercq from Deutsch Kerrigan in New Orleans reached out today to share what he learned from the Hurricane Katrina property insurance litigation. As Ted described (and I remembered), some early court decisions in Louisiana used the doctrine of reasonable expectations to reach favorable decisions for policyholders regarding the application of the flood exclusion. Those decisions didn’t last on appeal, however.

While of course there are many distinctions between the application of the flood exclusion in the Katrina cases and the application of the virus exclusion and other coverage defenses in the Covid-19 cases, Ted’s larger point is spot on.

This kind of massive litigation event is a long game. Early wins are nice for whoever gets them, but those wins may not tell us much about what happens in the end. Check out Ted’s article (with his partner Francis Barry) on Covid-19 and business interruption losses in the Louisiana Bar Journal here.

Learning from NatCats: Is the onslaught of cases yet to come?

Post author By Tom Baker
Post date July 14, 2020

Author: Sean Bissey Date: 07.14.20

In earlier posts I described how Lex Machina’s insurance analytics platform allows us to track the filing of business income lawsuits over time and how the NatCat and Covid-19 cases appear as spikes in that timeline. Today’s chart shows how the NatCat suits rolled out over time. In each case, the suits trickled in at first, and only reached the peak rate of filing one or two years after the NatCat event. If the Covid-19 business income lawsuits filing rates are anything like that, we won’t see the peak until at least late 2021.

Analytics Business Income Cases Nat Cat comparisons

Updated Q2 data comparing Covid 19 Business Interruption Litigation to Earlier Nat Cat litigation

Post author By Tom Baker
Post date July 10, 2020

Author: Sean Bissey Date: 07.10.20

Now that we have the full Q2 case filings from Lex Machina, I updated the chart I posted on June 26, which shows the business interruption insurance coverage cases filed in federal courts since 2009 (the first year for which Lex Machina has the full set of cases filed in federal court). The difference between the Covid-19 case filings and the earlier Nat Cat filings is now even more stark. The Covid-19 bump is five times the fiver year trailing average, and the excess over the average for the Covid-19 filings is over twice the total of the excess filings during the quarters dominated by the earlier Nat Cat filings.