Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland

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Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
MARYLAND

Messenger        MAY/JUNE 2020

            COVID-19
            SPECIAL EDITION
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
WAY
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Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
In This Issue

                                                 4      Chairman’s Message
                                                 5      Navigating Through Uncharted Waters
                                                 7      Ask Pat
                Big I Maryland
        2408 Peppermill Drive, Suite A
                                                 9      What our Partners Carriers are Doing to Aid Insureds?

            Glen Burnie, MD 21061                11     Maryland Insurance Administration Bulletin
     (P) 410-766-0600 | (F) 410-766-0993         13     Worker's Compensation, COVID-19 and 3.A.

                  Editor:                        16     Business Income Insurance
             Rebekah Langford                    21     Maryland Insurance Administration Advisory

             Graphic Designer:
                                                 24     The Big "I" Maryland 2020 Legislative Session Summary
    Maritza Dintino / ColorCraft Printing        30     Tidbits

         EXECUTIVE COMMITTEE
                                                 32     Big "I" Legislative Conference
                                                 33     Markets
                  Chairman                       37     Life Corner
       Gerald Zoller, CPCU - Eldersburg
                                                 38     Does the PAP Cover Food Delivery?
         Immediate Past Chairman                 41     You're Suddenly Managing Remote Teams, Now What?
        John Cabrera - Germantown
                                                 42     Education Corner
               President                         43     Additional COVID-19 Resources
    Rebekah Langford, AAI - Glen Burnie
                                                 ADVERTISERS
          State National Director
        Angela Ripley, CIC - Columbia            Big I Maryland would like to THANK all of our advertisers for
                                                 their continued support! The Maryland Messenger would not
               Chairman-Elect                    be possible without them.
        Jerry Nicklow, AAI - Pasadena
                                                 Berkshire Hathaway GUARD Insurance Companies
                                                 Potomac Insurance Network, Inc.
                Vice Chairman
                                                 Preferred Property Program, Inc.
            Ivory Buck, III - Easton
                                                 Builders Mutual
                                                 Insurance Brokers Service Corporation
              Director-At-Large                  Chesapeake Employers Insurance Company
      Christopher Weller - Huntingtown
                                                 The Maryland Messenger is a bi-monthly publication published
        Past Chairman Representative             for the exclusive use of regular and associate members of the
       Angela Ferguson - Westminister            Big I Maryland. Publication of any article, letter to the editor
                                                 or advertisement in the Maryland Messenger should not be
                DIRECTORS                        deemed as an endorsement by Big I Maryland of the opinions
                                                 expressed or product advertised. Questions and comments
Stacey Nicholson, CIC, CPCU, LUTCF - Annapolis   should be directed to the editor; Rebekah Langford.
       Nancy Nicklow, CPCU -Pasadena
   G. Bradford Reeves, AAI, AFIS - Chaptico      Editorial Office
       Enver Berker Hazar - Kensignton           2408 Peppermill Drive, Suite A
                                                 Glen Burnie, MD 21061
                                                 (P) 410-766-0600 | (F) 410-766-0993
                                                 Email: rebekah@BigIMD.com | www.BigIMD.com
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
Chairman’s
Message

                                                                                         Gerald "Gerry" Zoller

A Personal Note from your 2019-2020 Chairman

When this crisis first started, you        we all should understand that change       by increasing remote support for
probably found yourself searching for      “is always there” or at the very least,    marketing, claims, and underwriting.
knowledge and information to help          “on the horizon”.                          The insurance companies continued
clients, employees, family, and friends.   We may start our day with a plan,          to keep lines of communication
Hopefully, you checked with your           but that plan can all change with a        open and responsive. Many put in
Association, Big I MD. Early on the        claim, service question, or customer       place easing of premium payment
staff was rapidly collecting and           issue that needs immediate attention.      guidelines and offers of refunds
posting valuable information for all       New innovations in equipment,              or credits on some personal lines
of our members as soon as it became        software, or technical advances            policies to help our customers.
available. I know firsthand that some      across industries can test our ability     When it seemed like their world
of our agency’s responses to the           to adapt and forge new paths to serve      was suddenly upside down, I found
tough questions were formulated            our clients.                               insurance customers surprised
around what we had learned from                                                       that service did not diminish. Their
                                           Along came the Coronavirus! Silent,        needs and inquiries were answered
our Association’s Coronavirus              invisible, deadly, and fast moving.
(COVID-19) resource page. If you                                                      as normal.
                                           Our industry’s ability to continue
have not gone to our resource page         servicing the needs of our clients         As insurance professionals, we can
lately, I encourage you to do so as        efficiently during a worldwide             be proud that through the worst of
soon as you can. Big I MD assembles        pandemic is a major challenge that         times we remain up to the challenge.
and disseminates knowledge that            we confronted head on with little          Faced with adversity and potentially
makes all of us better insurance           warning. I believe history will show       disruptive change, we answer the
professionals. Rapid response and          we did it not only rapidly, but we did     call. The people that make up our
presentation of accurate educational       it well.                                   industry have a mindset of helping
information are the hallmarks of                                                      the customer no matter what it takes.
what we do. Your membership                In speaking with a number of
                                           member agencies in the last few            I thank each and every one of you,
and participation in Big I MD is an                                                   especially our Association staff who
important part of that mission!            weeks, I found many examples of how
                                           innovation and rapid deployment of         make sure you are equipped and
Resilience                                 agency resources almost completely         informed during challenging times
I have often mentioned that change         realigned how business was being           so we can deliver our best when
is a fundamental part of our industry.     done. A number of agencies                 customers need us most.
From anyone just entering the              established work from home for             Stay safe.
insurance industry to veterans with        the majority, if not all of their staff.
years of experience in our business,       Insurance companies joined the effort

Maryland Messenger         2020 MAY/JUN                                                                                 4
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
Navigating Through
Uncharted Waters:
COVID-19 and Health
Insurance
By Al Redmer, Jr.
Maryland Insurance Commissioner
The COVID-19 State of Emergency is a        industry leaders want to do the right         to encourage social distancing.
now constant reminder that we never         thing – mainly because they’re good         • Prior authorizations: The
fully know what’s around the corner in      citizens, but also because it’s good          majority of carriers have relaxed
life, even as we try to plan for a stable   business in a competitive environment.        some of their prior authorization
future for ourselves and our families. In   Since the COVID-19 crisis began, we’ve        requirements. Several are waiving
times like these, insurance becomes a       held five conference calls with health        prior authorizations for non-elective
major concern.                              insurers active in Maryland to talk           hospital admissions and some
The Maryland Insurance                      about the challenges consumers and            are waiving concurrent review
Administration’s goal is to provide         companies are facing as we navigate           for hospitalizations, and some
efficient, effective service to both the    these unprecedented times. I’ve been          will honor previously approved
consumers of insurance products             very impressed by the actions taken so        authorizations for elective surgeries
and the insurance industry. Our             far by insurers to help their customers.      that need to be rescheduled.
most important job is assuring the          In many cases, one insurer will show        • Premium payment and
fair treatment of consumers, with all       leadership or innovation in a particular      employer coverage issues:
carriers following Maryland law. When       area and others will follow the lead.         Most carriers have indicated
we go through a crisis like COVID-19,       For example:                                  they will work with consumers
our agency’s role as a regulator is a        • Telehealth expansion: Carriers             to accommodate difficulties with
critical part of the state’s response.         have expanded access to telehealth         premium payments. One carrier
Regulation can often sound scary,              across the board. All major carriers       has officially announced it will defer
conjuring up images of an adversarial,         have started waiving cost-sharing          premium for up to two months
“big stick” approach. To be sure, we           for many in-network non-COVID-19           with no interest or penalty upon
sometimes need to enforce the law              telehealth visits, and several             customer request. Many carriers
with serious penalties for violators.          are waiving in-network and out-            are working with employers
At the direction of Governor Hogan,            of-network cost-sharing for all            directly on a case-by-case basis to
we’ve also taken some strong                   telehealth visits, including many          accommodate specific requests to
emergency actions in response to               specialties. Many are covering             ensure continuity of coverage for
COVID-19, including requiring carriers         phone-only consultations in certain        laid off employees.
to waive any time restrictions on              situations. Several are ensuring that   “We’ll get through this, together” is
prescription medication refills and            reimbursements for telehealth are       a common theme throughout the
authorize payment to pharmacies                the same as in-person visits.           country and world these days. We’re
for at least a 30-day supply of any          • Treatment of COVID-19: Most             putting that into practice at the
prescription medication.                       carriers are waiving cost-sharing for   Maryland Insurance Administration
But, overall, I’m a strong believer in         all COVID-19 treatment (this includes   by taking an inclusive, collaborative
collaboration, of working together             out-of-network services for some of     approach. We’re regulating, we’re
to find solutions. When it comes to a          the carriers).                          listening, and we will continue to
crisis, we want to help insurers help        • Prescription drugs: Several             advocate for Maryland citizens and
consumers. It’s been my experience             carriers are offering free home         businesses.
that the vast majority of insurance            delivery of prescription medications

Maryland Messenger          2020 MAY/JUN                                                                                    5
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
Big “I” Professional Liability Program
 Risk Management Reference Guide
                             The Big “I” Professional Liability program believes that risk management is key in not only preven�ng errors, but also in
                             providing agencies with tools to more efficiently service their customers. All policyholders of the Swiss Re Corporate
                             Solu�ons/IIABA professional liability program have exclusive access to the risk management informa�on developed from our
                             more than �0 years of experience insuring agencies. As a reminder, �estport Insurance Corpora�on is a member of Swiss Re
                             Corporate Solu�ons. These risk management resources are exclusively available to your agency as a valued policyholder of the
                             Swiss Re Corporate Solu�ons/member of IIABA.

 Big “I” Risk Management Website – E&O Happens                               Agency E&O Seminar
 This website contains comprehensive informa�on and tools such               Administered by IIABA state associa�ons, E&O seminars are an
 as an overview of common mistakes that cause E&O claims; real-              excellent way to increase procedural and knowledge-based E&O
 life case studies for learning; best prac�ce �ps; sample disclaimers,       risk management awareness to agency personnel. Agencies with
 procedures and client le�ers; opera�onal self-assessments; E&O-             the requisite number of staff a�ending may qualify for a 10%
 related ar�cles, and more. Visit www.iiaba.net/EOhappens to log             premium credit and may also qualify for CE credits, providing a
 in. (FREE)                                                                  double benefit. (Fee-based)

 Big “I’ Virtual Risk Consultant Powered by Rough Notes (VRC)                Agency Opera�onal Improvement Review
 The VRC is a web-based resource providing comprehensive tools               A review of your agency opera�ons is available. Voluntary comple-
 such as industry specific client risk exposure checklists and                �on of this review may qualify you for a 10% E&O premium credit
 ques�onnaires. VRC helps agents to be�er understand the                     good for five years on the next renewal. (Fee-based)
 coverage needs of customers and avoid E&O claims from failing to
 offer proper coverage and failing to iden�fy customer exposure.              Big “I” Virtual University
 Visit www.iiaba.net/VRC to learn more. (Fee-based)                          VU is a web site with informa�on on hundreds of insurance
                                                                             related business and technology ar�cles, sample ISO forms, white
 E&O Claims Advisor Newsle�er                                                papers and informa�on affec�ng today�s insurance marketplace.
 Published monthly and emailed to agency staff, this newsle�er                It also provides a forum to answer ques�ons that can�t otherwise
 provides valuable informa�on on agency E&O trends and hot                   be found in the research library through the “Ask an Expert”
 topics. (FREE)                                                              service. Visit www.iiaba.net/VU. (Free)

 Risk Management Webinars                                                    Big “I” Agents Council for Technology (ACT)
 These quarterly webinars address emerging E&O risk management               ACT brings agents, carriers, vendors, user groups and industry
 topics. Less than an hour in length and perfect for all agency staff,        associa�ons together in an effort to employ the best workflows
 the webinars include detailed discussion from industry leaders on           and technologies available within the independent agency system
 reducing exposure to E&O claims. (FREE)                                     in order to improve our compe��ve edge. Please visit the ACT
                                                                             website at www.iiaba.net/ACT and watch the short video briefing
                                                                             on the site to get a good overview of the high-quality informa�on
                                                                             that we make available to agents and carriers. (Free)

    Should you have any ques�ons, please contact your state associa�on or �im �anley at �im.hanley�iiaba.net. �e appreciate your
    con�nued support of the Big “I” Professional Liability Program and Swiss Re Corporate Solu�ons and hope you find these risk
    management resources useful in helping your agency avoid E&O claims.

Maryland Messenger           2020 MAY/JUN                                                                                                          6
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
Ask Pat                                             Patricia McHugh Lambert
                                                                Pesin Katz Law, P.A.
                                               901 Dulaney Valley Road, Suite 400
                                                          Towson, Maryland 21204
                                              410.938.8800 • 410.339.6759 (direct)
                                         410.832.5628 (fax) • plambert@pklaw.com

Leadership in Times of Crisis
I have been thinking a lot about           remotely produced show,               the wheat from the chaff, a
how a crisis can make or break a           change happens in a crisis and        process that needs to start
leader. Abraham Lincoln’s legacy           can produce effective results.        before a crisis.
was based upon how he handled              Of course, change must be           3. Leaders need to have access
the crisis of the Civil War. Stephanie     monitored. For example, the            to the right people. In a crisis,
Rawlings-Blake received harsh              Maryland Judiciary originally          it is important to know the
criticism due to her handling of the       used Zoom for arguments,               right people. For example,
2015 Baltimore riots. Dr. Anthony          but when issues arose with             those individuals with a solid
Fauci has, at least as the writing of      Zoom, other platforms were             relationship with a bank had
this article, received great praise        explored. Leadership requires          an easier time applying for
due to his calm and straight forward       comfort with change, regardless        money from the stimulus
approach to providing information          of whether there is a crisis.          package. Those of us in the
and leadership relating to the             This crisis has reminded me to         legal field who had access to
COVID-19 crisis. This COVID-19 crisis      embrace change.                        bar and judicial leadership
should cause all of us who consider      2. Leaders must understand that          could ask questions about the
ourselves to be leaders to think.           trustworthy information is            operation of the courts and the
Crisis in the time of leadership is         essential. There have been so         future of litigation. Insurance
difficult. There is often less time,        many rumors, half-truths and          professionals who belong to a
less people and less resources              outright lies that have infected      strong association can obtain
during a crisis. But every true             the ether of social media and         and share needed information.
leader learns something from                newsfeeds during this crisis.         Leaders need to develop such
a crisis—something that can be              Leaders, however, must have           access so that they can ask the
used in more ‘normal’ times. In             credible information to rely on       right people the right questions.
this article, I want to let you know        in order to make decisions. I      4. Leaders need to seek out
a few things that I have learned—           have been particularly aware          their peers and ask for help.
or relearned-- during this current          that I need reliable information      Sometimes we, as leaders, feel
health crisis.                              in order to make decisions,           like we stand alone when we
 1. Leaders must expect that we             particularly to get a sense of        make a decision. We feel like
    will not be doing things the            what is going on in my industry       we are the only ones that have
    same way. During this crisis,           and the financial lay of the          faced certain challenges, when
    I have been impressed at how            land. I read news feed from           in actuality other peers have
    leaders have approached the             credible accountants, attorneys,      faced similar challenges. The
    issue of needed change. From            government officials and news         information and insight that
    Governor Hogan’s emergency              resources. I try to add my own        these peers can provide can be
    order allowing, for example,            credible voice to issues when         invaluable. Leaders have peers
    the remote witnessing of                I feel that I need to speak. The
    wills to Saturday Night Live’s          key is knowing how to separate
                                                                                                   (Con’t on page 8)

Maryland Messenger        2020 MAY/JUN                                                                         7
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
(Con’t from page 7)                        I will be completely offline. I            Oath, the oath that doctors
                                           have updated documents, like               take that is “first, do no harm.”
                                           wills, healthcare directives and           The leader’s oath, however,
    they can call upon, even if their
                                           powers of attorney—something               should be “First, try to do no
    peers are competitors. During
                                           that I have been putting off for           harm.” Trying to do no harm,
    this COVID-19 crisis, I have
                                           some time. I have also tried to            of course, requires recognition
    received so much assistance
                                           be a better boss by reaching out           as to how harm can occur. I
    from other leaders who have
                                           more—making sure that I talk to            have seen so many businesses
    helped me with the struggles
                                           people by phone, FaceTime or               making decisions during this
    that I have faced. The value of
                                           by virtual connection. Leaders,            crisis that are contrary to the
    sharing troubles is something
                                           even busy leaders, must think              law and executive orders. I
    that we all need. We just
                                           about how often they respond               have seen businesses making
    sometimes need to put aside
                                           by a terse email—and how that              decisions that do not respect
    our pride and ask for assistance
                                           impacts people. Our people are             privacy. I have seen knee jerk
    and advice.
                                           our most valuable resource and             decisions made that simply
 5. Leaders need to be transparent         we should treat them as such—              lacked thought. This crisis, more
    and decisive when making a             crisis or no crisis. Pick up the           than anything, demonstrates
    tough decision. During this            phone and talk! And take a little          that decisions—whether a
    COVID-19 crisis, I have not            time for yourself!                         decision to act or a decision not
    envied the hard decisions                                                         to act—can lead to devastating
                                         7. Leaders think about who is
    that Governor Hogan and                                                           consequences. Leaders
                                            important to their business.
    our local leaders have had to                                                     understand this.
                                            During a crisis, it is hard to stay
    make. As our state faced an
                                            in touch with the all the people       9. Leaders think about the
    unprecedented public health
                                            who are important. When                   changes that need to be made.
    crisis, decisions had to be made
                                            we deal with our own issues,              A time of crisis demonstrates
    about medical equipment,
                                            the issues of our employees,              flaws in an organization. Some
    school, unemployment
                                            and whatever financial or                 of the flaws are large. Some
    assistance and real life-
                                            operational crisis we are                 small. All need to be dealt with
    and-death decisions. These
                                            having, there is little time for          and changed. When this crisis
    Maryland leaders have been
                                            anything else. But we must                is over, many are going to try
    both decisive and transparent
                                            remember who is important to              to get back to an old normal.
    with their decisions and
                                            our business. For me, it is my            The true leaders will embrace
    have been willing to answer
                                            clients. During this COVID-19             the flaws and encourage the
    questions as to the how and
                                            scare, I have had to think about          changes they inspired.
    why they made hard decisions.
                                            how I deal with my clients and        10. Leaders understand that there
    I have watched leaders in my
                                            prospects. So, this has reminded          will be the next crisis. As we
    own business explain difficult
                                            me to understand who my best              live through this crisis, we
    decisions. Again, the crisis
                                            15 to 20 contacts are and to              should recognize that there will
    has reminded me that we, as
                                            keep up those relationships. I            always be another crisis. We will
    leaders, are not called upon to
                                            am trying to strengthen my                not know what that crisis is, but
    do the easy; we are called upon
                                            outreach to my networks and to            we will be called upon to deal
    to do the hard.
                                            professional relationships. What          with it.
 6. Leaders need to know that               I have found is that many people
    they need to take care of               are hungry for contact—they           All of this is hard and will continue to
    themselves and their people             want someone to reach out to          be hard for a time to come. When
    first. During this pandemic,            them. And this is something           this crisis nears conclusion, we will all
    I have been recovering from             that I will remember when this        need to take a breath and think about
    surgery—good timing I know.             crisis is over.                       how we can become better leaders.
    But it has reminded me that I
                                         8. Leaders understand that
    am not effective unless I have
                                            things can get worse. I think
    my strength and my health.
                                            that all leaders should take
    So, I have set myself limits as
                                            a version of the Hippocratic
    to when I will work and when

Maryland Messenger        2020 MAY/JUN                                                                                8
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
What our Partners
Carriers are Doing to
Aid Insureds During
the Pandemic?
By Shelley Arnold, CPCU, AU, ARM, AAI, ACSR, AIS

One thing for certain, the Coronavirus     this challenging time is simply the       supply deliveries. See Maryland
has cleared the congested roads            right thing to do.                        Bulletin 20-15 (https://insurance.
throughout Maryland. Highways and          Insurers are also helping through         maryland.gov/Insurer/Documents/
byways are empty. This has led many        other relief programs. After multiple     bulletins/20-15-Commercial-Use-
insurers to announce a discount or         Bulletins (https://insurance.             Exclusion-in-PPA-policies.pdf)
rebate, if you would, to drivers. The      maryland.gov/Insurer/Documents/           At least one carrier, Travelers,
‘stay at home’ order declared by           bulletins/20-10-Cancellation-of-          is accelerating more than $100
Governor Hogan, means less cars on         insurance-policies-during-covid-          million in commission payments to
the streets and highways, resulting in     19-SOE.pdf) and 20-17 (https://           eligible agents and brokers and has
less accidents.                            insurance.maryland.gov/Insurer/           pledged $5 million to assist families
According to CNA Business, the             Documents/bulletins/20-17-                and communities affected by the
top 10 insurers, who write 72% of          COVID-19-Contractual-Deadlines-           COVID-19 pandemic across North
the market, will be participating in       within-Propery-and-Casualty-              America, the United Kingdom and the
refunds. The refunds vary, not only        Insurance-Policies.pdf, issued by         Republic of Ireland.
in amounts, but also the amount of         Commissioner Alfred Redmer,               “As so many are facing a significant
time that will be covered to determine     Jr., and the Maryland Insurance           financial burden due to the COVID-19
the refund. For example, State Farm        Administration urging companies           pandemic, we want to show our
announced it will be providing a 25%       to assist through accommodations          agent and broker partners, many of
discount covering a 10 week period.        such as grace periods, suspensions        whom are small business owners,
The majority of the carriers taking        of premiums due, extension of billing     our support at this challenging time,”
similar actions are using the April-May    due dates, waiver of installment          said Alan Schnitzer, Chairman and
period. The percentage of the rebate       and late payment fees and taking          Chief Executive Officer of Travelers.
varies. Travelers (15%), Allstate (15%),   steps to avoid cancellations due to       “Independent agents and brokers not
the Hartford (15%), Progressive (20%),     nonpayment. They also urge that           only provide invaluable counsel and
Liberty Mutual (15%), Cincinnati (15%)     policyholders use all of the electronic   care to our customers but also play
and Safeco (15%) are some carriers         means available to make payments,         a critical role in the U.S. economy,
providing premium relief.                  etc. Bulletin 20-17 also gives guidance   and we are committed to standing by
One carrier, Erie, is taking a different   with respect to contractual conditions    them.”
approach to assist their insureds.         such as sworn statements, time to
                                           make necessary repairs, etc. To           FEMA has issued bulletin (https://
Erie has filed a rate reduction for                                                  www.nfipservices.floodsmart.
both personal and commercial.              date, the MIA has issued eight (8)
                                           Bulletins directly related to COVID-19.   gov/sites/default/files/ w20002.
This will assist throughout the year,                                                pdf) extending the grace period for
not just two months. According to          Patricia McHugh Lambert provides an
                                           excellent overview on page 11.            payment of NFIP premiums due
Erie Insurance President and CEO                                                     to COVID-19. For policies with the
Tim NeCastro, while ERIE’s pricing         Many carriers are also providing          expiration between February 13th,
philosophy has always centered             coverage for insureds whose job           2020 and June 15th, 2020, FEMA has
around providing exceptional               responsibilities now include using        extended the grace period for receipt
protection and service at the lowest       their personal automobile to make
possible cost, lowering rates during       food, grocery, pharmacy and medical
                                                                                                          (Con’t on page 10)

Maryland Messenger          2020 MAY/JUN                                                                               9
Messenger COVID-19 SPECIAL EDITION - Independent Insurance Agents of Maryland
(Con’t from page 9)                             loss due to COVID-19 could recover                   see the hazards of the passage of
                                                those losses from the insurer. It                    these bills and the impact this will
                                                would be retroactive for any insureds                have on the industry. Paying for
of renewal premium payments from
                                                with business interruption policies in               claims where no premium has been
30 to 120 days. This extension allows
                                                place from March 9, 2020 (the date of                collected could potentially bankrupt a
customers additional time to pay their
                                                the declared public health emergency                 carrier and could make it impossible
flood premiums to avoid any lapse or
                                                by NJ Governor Phil Murphy. It would                 to pay claims where premium has
reduction in flood coverage.
                                                apply to any business with less                      been collected. The Massachusetts
One evolving and volatile issue                 than 100 employees. Other states                     Governor even stated that he felt the
in commercial lines is whether                  that have followed New Jersey are                    insurance companies should pay. It is
the Business Interruption policy/               Massachusetts with the introduction                  quite apparent that most legislators
coverage will respond. New Jersey is            of SD.2888 and Ohio HB589. Both                      do not understand the insurance
attempting to legislate that business           Massachusetts and Ohio’s bills are                   mechanism.
income coverage respond even if the             almost identical with a March 9 or 10                This issue continues to make
form contains the 'virus exclusion'.            retro date, but with Massachusetts                   headlines. Stay tuned and stay
Bill A3844 (https://www.njleg.                  bill applying to businesses with 150                 informed.
state.nj.us/2020/Bills/A4000/3844_              or less employees. At the time this
I1.HTM) would alter the specific                article was written, none had passed.                The Big I appreciate the measures
exclusion contained in the business                                                                  being taken by our carrier partners.
                                                The states are already seeing a jump
interruption form for viruses. It
                                                in litigation in this area. Hopefully,
provides that businesses that
                                                the legislatures of the states will
experience a business interruption

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Maryland Messenger             2020 MAY/JUN                                                                                                        10
Maryland Insurance
Administration
Bulletin Related to
COVID-19 Crisis
By Patricia McHugh Lambert

There is so much being written           insurance.maryland.gov/Insurer/         reasonable accommodations may
about the legal issues surrounding       Documents/bulletins/20-17-COVID-        include suspensions of premiums
the pandemic that it is hard to know     19-Contractual-Deadlines-within-        due, extension of billing due dates
where to begin reading. Today, we        Propery-and-Casualty-Insurance-         and premiums grace periods, and
are providing information related        Policies.pdf.                           waiver of installment and late
to Bulletins issued by the Maryland      Bulletin No. 20-16 deals with           payment fees. Bulletin No. 20-
Insurance Administration (“MIA”)         title insurance producers. This         14 applies to Maryland-domiciled
concerning the COVID-19 Pandemic.        bulletin specifically allows title      insurers and deals with waiver of
Bulletin No. 20-17 deals with            insurance producers to conduct          the Statutory Accounting Principle
contractual deadlines within             remote settlements during the           that requires an insurer to non-
insurance policies. The MIA has          COVID-19 crisis, provided that          admit premium receivable assets
specifically requested insurers to       certain protocols are followed.         over 90 days past due. https://
“be lenient” in the application of the   The protocols are specified in          insurance.maryland.gov/Insurer/
policy language requiring “notice        the bulletin. https://insurance.        Documents/bulletins/20-10-
of a claim promptly.” Insurers are       maryland.gov/Insurer/Documents/         Cancellation-of-insurance-policies-
specifically requested to consider       bulletins/20-16-Conducting-Mobile-      during-covid-19-SOE.pdf; https://
“whether or not late notice of a         Settlements.pdf.                        insurance.maryland.gov/Insurer/
claim was preventable and if the                                                 Documents/bulletins/20-14-
                                         Bulletin No. 20-15 deals with certain   Premium-Receivables-over-90-days-
late-notice actually prejudiced          private passenger automobile
the insurer’s ability to adjust the                                              during-COVID-19-SOE.pdf
                                         insurers suspending the commercial
claim.” Similarly, insurers are          use exclusionary language in their      Bulletin No. 20-13 concerns the
requested to consider limiting           contracts during the COVID-19 crisis.   temporary suspension of the
the use of “Sworn Statement in           The bulletin explains how insurers      45-day advance mailing notice
Proof of Loss” and to consider           may make an endorsement form            of cancellation, non-renewal or
the use of electronic signatures.        filing that temporarily suspends        premium increase for private
The MIA has further reminded             the commercial use exclusionary         passenger automobile liability
insurers that policyholders should       language in their contracts. https://   insurance for the duration of
not be penalized for delays that         insurance.maryland.gov/Insurer/         the state of emergency. Specific
might be caused by the COVID-19          Documents/bulletins/20-15-              information is provided as to what
crisis, particularly in considering      Commercial-Use-Exclusion-in-PPA-        efforts insurers should make and
the policy benefits for additional       policies.pdf.                           the extended timing for protests.
living expenses, loss of use, rental                                             https://insurance.maryland.gov/
reimbursement, and business              Bulletin Nos. 20-10 and 20-14 deals     Insurer/Documents/bulletins/20-13-
interruption claim. For EUOs,            with premiums. In Bulletin No. 20-      Temporary-Suspension-of-45-day-
insurers are forbidden to take in        10, the MIA strongly encouraged         Advance-Mailing-Notice-PPA.pdf
person examinations without the          insurers to make reasonable
                                         accommodations so that individuals      Bulletin No 20-09 concerns
agreement of all parties; even with                                              what insurers offering travel
the agreement of all parties, there      and businesses do not lose coverage
                                         due to non-payment of premium           insurance policies offer during the
must be strict adherence to all
social distancing protocols. https://    during the COVID-19 emergency.
                                         The MIA specifically noted that                             (Con’t on page 12)

Maryland Messenger        2020 MAY/JUN                                                                            11
administrative offices. https://        specific exclusions for loss or
(Con’t from page 11)
                                        insurance.maryland.gov/Insurer/         damage caused by war, nuclear
                                        Documents/bulletins/20-18-COVID-        action and radiation. The potential
COVID-19 crisis. https://insurance.     19-Motor-Vehicle-Registrations.pdf      loss costs from such perils are so
maryland.gov/Insurer/Documents/                                                 extreme that providing coverage
                                        Bulletin No. 20-20 deals with the
bulletins/20-09-Travel-Insurance-                                               would jeopardize the financial
                                        financial challenges of Maryland’s
sales-during-COVID-19-SOE.pdf                                                   solvency of property insurers.
                                        business community and what
Information regarding COVID-19          insurers should do to assist. With      Global pandemics like COVID-19
provider frequently asked               respect to workers compensation         usually fall into this category.
questions can be found at https://      policies, insurers are requested        However, policies can be different.
insurance.maryland.gov/Providers/       to work with producers to               We recommend that businesses
Documents/COVID-19-Providers-           accommodate policyholder requests       review their policies and reach out
FAQs.pdf. Information regarding         for mid-term revisions to premiums      to their insurance professionals with
frequently asked question on            based upon COVID-19 furloughs and       any questions.” https://insurance.
producer licensing can be found         layoffs. This Bulletin also requests    maryland.gov/Pages/newscenter/
at https://insurance.maryland.          that insurers waive or reduce “to       NewsDetails.aspx?NR=2020256
gov/Documents/newscenter/MIA-           the greatest extent possible” short-    We expect additional bulletins and
Producer-Licensing-COVID-FAQ.pdf.       rate cancellation penalties during      information to be issued during the
Bulletin No. 20-18 deals with           the COVID-19 crisis. Insurers that      upcoming weeks.
Motor Vehicle Registrations and         use credit in underwriting are also     Other Information: There is a
Commercial Automobiles and Fleets.      urged to take into consideration the    COVID-19 resource page that has
The Bulletin notes that owners          impact of the crisis; insurers are      important information, including:
of multiple vehicles, including         specifically urged to “rely heavily”
                                        on pre-COVID-19 information and to        • Contract information for
commercial fleets, may want to
                                        consider an insured’s or applicant’s        key Maryland Insurance
put some vehicles out of service
                                        history over a period “of several           Administration personnel.
during the COVID-19 crisis, so
as to discontinue coverage and          years”. Commercial insurers are           • Responses to frequently asked
thereby reduce premiums. The            also urged “to refrain from attaching       questions, including questions
Maryland Insurance Administration       any adverse underwriting or pricing         relating to extended filing
encourages insurers to work with        outcomes for insureds who have              deadlines, the waiver of the
policy holders to make premium          made inquiries or file Business             requirement of “wet” signatures
reductions without the return of        Interruption claims that have               for filings, and the fact that
tags. This reduction of premium         not resulted in a claim payment.”           there is no change in the service
issue has been the subject of a         https://insurance.maryland.gov/             procedures for litigation filings
number of Bulletins and insurers        Insurer/Documents/bulletins/20-20-          against insurance companies.
should consider having a plan in        Commercial-Insurance-COVID-19.pdf           https://insurance.maryland.gov/
place to deal with such issues.         The MIA has also issued an advisory         COVID-19/Documents/EandA-
https://insurance.maryland.gov/         on business interruption insurance.         COVID-FAQs.pdf
Insurer/Documents/bulletins/20-         As stated in this advisory, “Some       Please feel free to contact us, your
18-COVID-19-Motor-Vehicle-              commercial policies provide             association, or the author of this
Registrations.pdf                       Business Interruption coverage          article regarding these Bulletins or
Bulletin No. 20-19 deals with           when a business is shut down due        their implementation.
quarterly premium tax payments.         to an Order by a civil authority.
                                                                                Ms. Lambert can be reached by phone
The bottom line of this bulletin is     However, the policy still typically
                                                                                at 410-339-6759 or email plambert@
that the Insurance Commissioner         requires a physical loss from a
                                                                                pklaw.com.
has the discretion to waive penalties   covered peril as the underlying
and late payments of quarterly          cause of the business shut down to
estimated premium taxes due on          apply. All insurance policies have
April 15, 2020. Importantly, an         exclusions of coverage for risks that
insurer should have documentation       are too great to be underwritten at
as to how the COVID-19 crisis           an affordable price. For example,
has impacted the operation              commercial and personal property
of the insurer’s premium tax            insurance policies typically contain

Maryland Messenger       2020 MAY/JUN                                                                            12
Worker's
Compensation,
COVID-19 and 3.A.
By Chris Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA,
CWCA, CRIS, AINS

Workers' compensation is regulated         a 3.A. primary state.                     If the employee simply lives across the
at the state level. Although there are     Does this same focused guideline          state line and travels to the employer's
some benefits to this, there are also      apply to employers located near           location, there are no operations in
problems created.                          state lines if employees live in a        the other state (the state of residency).
Because work comp is state based,          neighboring state and travel across       Because the employees are or may
the policy responds only when a state      state lines to get to work? Yes, as       soon be quarantined in their homes,
is specifically listed as either a 3.A.    per the Coming and Going Rule.            there are now operations in another
(primary) state or granted protection      Traditionally the coming and going        state – specifically the employee's
as a 3.C. (secondary) state, which may     rule holds that injuries suffered         state of residency. Whether the
or may not require a specific listing      traveling to or home from work, or        employee's home state needs to be
depending on the insurance carrier.        even while going to and returning         listed as a 3.A. state is a function of
                                           from lunch, are not compensable.          permanency and the extraterritoriality
Primary or 3.A. status is required when:                                             and reciprocity provisions of the
                                           The logic behind the rule is that
 • Gaps exist between the                  the employee is not furthering the        states in question (the employer's
   extraterritorial provisions of the      employer's interest or serving the        operational state and the employee's
   home state and the reciprocity          business' need while travelling to        state of residency).
   allowances of the state to which        or home from work; the employee           If the employee likes working from
   the employee travels to work            is serving his or her own needs (the      home and the employer sees no drop
   temporarily; or                         need to have a job and earn a living).    in quality and quantity of work (maybe
 • There are on-going (not temporary)      Because of the coming and going           even an increase in both), working
   operations in a state.                  rule, even when a location-specific       from home may become permanent.
                                           employee lives in another state, the      If these home-based “operations"
Deciding which state or states
                                           state of residency is not required        become permanent, the employee's
require(s) listing as a 3.A. state is
                                           to be listed as a 3.A. state. The         state of residence should or must be a
easy when the employees are based
                                           employees are assigned to the             3.A. state.
in a single location – such as an
office building or service location.       operational location.                     But if the situation is only temporary
At least it used to be - COVID-19 has      COVID-19 Complications                    and will never be anything but
complicated the issue.                                                               temporary, should the employee's
                                           COVID-19 may have complicated the         state of residence be listed as a
Single Location Employees                  issue and even negated the idea of        3.A. state during the temporary
When employees work at a single            the coming and going rule. Historically   relocation? The answer depends on
location such as an office building,       the “Coming and Going Rule" has           the application of the involved state's
service location or a manufacturing        allowed employers to “ignore" an          extraterritoriality and reciprocity
plant, 3.A. assignment is easy.            employee's state of residence, but        provisions. Basically, the answer is
Regardless where the employees             COVID-19 has pushed employees out         complicated because state variations
live, only the state in which the          of the employer's location and has        must be considered.
operation(s) is/are located must be        required them to set up operations
considered when extending status as        in their home. Now the state of
                                           residence may matter.                                           (Con’t on page 14)

Maryland Messenger          2020 MAY/JUN                                                                                 13
(Con’t from page 13)                          regulations linked here: https://       Given these circumstances, it appears
                                              www.independentagent.com/               Arkansas needs or must be listed as a
                                              vu/Insurance/Commercial-                3.A. state. There is no doubt Arkansas
Extraterritoriality and Reciprocity
                                              Lines/Workers-Compensation/             must be named a 3.A. state if the
Extraterritoriality and reciprocity           ExtraRecipStatutes.aspx                 employees are working there more than
issues present a major problem for                                                    14 consecutive days because Tennessee
                                            • A webinar https://www.
agents. Which state or states must be                                                 law says that more than 14 days is not
                                              iiaba.net/education/preview.
listed as primary 3.A. states, which                                                  considered temporary. Further, because
                                              aspx?evt=27849 detailing
states can be listed as secondary                                                     the Arkansas reciprocal requirements
                                              extraterritoriality and reciprocity.
(3.C.) states and which states can be                                                 are fuzzy, not naming it as a 3.A. state
essentially ignored?                       Let's look at a couple examples of         may prove problematic.
                                           extraterritoriality and reciprocity to
Remember that the extraterritoriality                                                 Example 2: Pennsylvania, Ohio and
                                           explore these concepts more fully.
and reciprocity concept apply only                                                    West Virginia
when the insured has employees in          Example 1: Tennessee and Arkansas
                                                                                      Assume the insured is located in
any state other than the domicile          One or several employees work in           Pittsburgh, PA. Because of its proximity
state or branch office states on a         Memphis but live just across the           to the southwest corner of the state,
temporary basis. If the operations         Mississippi River in Arkansas. Assume      employees drive daily from Ohio
are anything other than “temporary,"       that a governmental mandate                and West Virginia for work. If these
the concept of extraterritoriality and     prevents these workers from coming         employees are forced to work from
reciprocity does not apply, the state      into Tennessee for work and they           home, are Ohio and West Virginia
with ongoing operations must be            are required to set up temporary           required to be listed as 3.A. states?
extended 3.A. status.                      operations in their homes in Arkansas.
                                                                                      First, the Pennsylvania's extraterritorial
Extraterritoriality relates to the         The first question, does the workers'      provisions must be reviewed and
coverage provided in the state             compensation policy for the                understood. Based on the reading
where the employer is located, and         Tennessee employer/insured follow          of the PA statute, extraterritorial
the employee is primarily based.           any employees while they work              protection appears to exist without
Extraterritoriality's primary question     temporarily in other states? The           a specific time limit. The only
is, does the employer's workers'           second question, does the state to         requirement appears to be that
compensation coverage follow the           which the employees travel to work         the employees are classified as
employee when he/she travels to            on a temporary basis recognize the         Pennsylvania employees. So, coverage
work temporarily in another state?         employer's workers' compensation?          extends from the Pennsylvania
The good news, every state provides
                                           Yes, Tennessee provides extraterritorial   employer's policy to workers working
extraterritorial protection. The bad
                                           coverage on a temporary basis.             from home on a temporary bases,
news, the extraterritorial extension of
                                           However, the amount of time is             whether in Ohio or West Virginia.
coverage is not consistent from state
                                           relatively short. State regulations        With the extraterritoriality question
to state.
                                           define “temporary" to mean no more         answered, are there reciprocity issues
The flip side to extraterritoriality is    than 14 consecutive days and no            that create problems? Ohio statute,
reciprocity. Does the state to which the   more than 25 days in the calendar          according to the state breakdown
employee travels to work recognize the     year (aggregate). On the fifteenth         linked above, reciprocates for 90
sending state's workers' compensation      consecutive day, Tennessee ends its        days. If the Ohio resident employees
coverage? Again, the answer is not         extraterritorial protection. When the      return to work before the end of 90
consistent and varies greatly from         “sending" state's coverage ends, the       days, the extraterritorial provisions
state to state.                            “receiving" state has jurisdiction.        of Pennsylvania and the reciprocity
Details of extraterritoriality and         Arkansas regulations aren't as clear.      provisions of Ohio allow the employer's
reciprocity are not the focus of this      The statute requires that the workers'     Pennsylvania coverage to respond.
article. However, several resources        comp carrier be licensed in Arkansas,      However, Ohio's administrative code
are available from the VU detailing        but there is no clear indication of        specifically addresses Ohio-based
extraterritoriality and reciprocity.       reciprocity, only and intimation. Thus,    employees while working in Ohio for
To fully understand the issues and         there may be no reciprocity, especially    out-of-state employers. According
concepts, access the following:            if the work comp carrier is not licensed   to the code, when the Ohio-resident
 • A state-by-state breakdown of the       in Arkansas.
   extraterritoriality and reciprocity                                                                      (Con’t on page 15)

Maryland Messenger          2020 MAY/JUN                                                                                  14
(Con’t from page 14)                        only for use when it's not clear that 3.A.   “coming and going rule" holds that
                                            status is needed or the carrier will not     travelling to and home from work does
                                            allow a state to be granted 3.A. status.     not benefit the employer (subject to a
employees are working in Ohio, they
                                            A Bogus 3.C. Carrier Claim                   few exceptions).
are subject to the Ohio workers'
compensation laws. So, any amount of        In response to a request to name             However, the pandemic panic has
time an Ohio resident spends working        a state a 3.C. state, underwriters           temporarily placed us in abnormal
in the state subjects the employer to       might say, “We can't list ________           conditions. Employees are working
Ohio law and benefits. It appears Ohio      as a 3.C. state because we are not           from home rather than at the
needs to be a 3.A. state from day one.      licensed there." This is a bogus claim;      employer's place of business. If
But this can't be done because Ohio         underwriters may not want to list the        these employees live in a state other
is a monopolistic state; thus, a policy     state, but they CAN.                         than where the employer is located,
must be purchased from Ohio.                                                             are these considered temporary
                                            Paragraph A.3. under Part Three –            operations in another state? If
West Virginia applies an odd provision.     Other States Insurance says: “We will        or because they are temporary
The West Virginia statute allows            reimburse you (the named insured) for        operations in a state other than
the employer and employee to                the benefits required by the workers'        where the employer/insured is
contractually agree on which state's        compensation law of that state if we         located, the question of workers'
benefits the employee desires to            are not permitted to pay the benefits        compensation must be addressed.
access. In the absence of such a            directly to persons entitled to them."       The state in which the employee lives
contract, the reciprocal allowances are
                                            Other than not being licensed in the         and is working temporarily must be
30 days in a 365-day period. If there is
                                            state, why would the carrier not be          specifically addressed.
no contract and if the employee works
                                            allowed to pay the injured worker? Just      Rather than attempting to interpret
in their home state of West Virginia
                                            because they don't want to list a state      state laws regarding the extraterritorial
beyond 30 days, West Virginia requires
                                            doesn't mean they can't. Don't let this      provisions and reciprocal allowances
3.A. status.
                                            objection stand unchallenged.                of each state's workers' compensation
As may be plain to see from these
                                            Home-Based Worker Injury                     law, simply name the employee's state
two examples, interpreting the
                                                                                         of residence as a 3.A. or 3.C. state
extraterritoriality and reciprocity         If an employee is injured while
                                                                                         (depending on what the underwriters
provisions of a given state can be and      working from home, will the injury be
                                                                                         will allow). There should be little or no
generally is tedious. Although a law        compensable? This is a reasonable
                                                                                         effect on premium. This assures there
degree is not required, it helps.           question, but the answer is far from
                                                                                         are no gaps in protection.
                                            simple.
What Agents Must Do
                                            Workers' compensation is designed
From and errors and omissions (E&O)                                                      Christopher J. Boggs, CPCU, ARM, ALCM,
                                            to pay for injuries arising out of and in
perspective, agents must take the                                                        LPCS, AAI, APA, CWCA, CRIS, AINS, is
                                            the course and scope of employment.
conservative approach and name the                                                       the Executive Director of the Independent
                                            Regardless where the employee is
employee's state of a residence as a                                                     Insurance Agents and Brokers of America
                                            injured, compensability is judged
3.A. state on an “If Any" payroll basis.                                                 (Big "I") Virtual University. His current duties
                                            against these guidelines.
If the employee is in a monopolistic                                                     involve researching, writing, and teaching
state, buy the in-state coverage. A         What was the employee doing                  property and casualty insurance coverages
less conservative but possibly still        when the injury occurred? Is there a         and concepts to Big "I" members and others
acceptable approach is to name the          reasonable connection between the            in the insurance industry.
employee's state of residence as a 3.C.     employment and the injury or was
                                            the employee pursuing his or her own         Boggs is a regular speaker at industry
Other State (but this doesn't work in
                                            interest? Any injury requires a fact-        events, speaking for groups such as the
a monopolistic state). A particularly
                                            intensive review.                            National Association of Mutual Insurance
bad approach is to try to interpret the
                                                                                         Companies (NAMIC), the National Society
laws of the relevant states and hope        Key Takeaways                                of Insurance Premium Auditors (NSIPA),
everything dovetails correctly.
                                            Under every day normal conditions            the American Association of Managing
If the state does not require 3.A.          employers are not required to include        General Agents (AAMGA), the Institute
status, there is no premium charge for      an employee's state of residence on          of Work Comp Professionals (IWCP),
naming the state. If the underwriter is     the workers' compensation policy - if        and the CPCU Society.
not willing to give 3.A. status, use 3.C.   that employee reports to and primarily
Remember, 3.C. is an “Oops" option          works at the employer's location. The

Maryland Messenger          2020 MAY/JUN                                                                                           15
Business Income
Insurance...Does It
Cover Coronavirus
Shutdowns?
By Bill Wilson, CPCU, ARM, AIM, AAM

On March 16, a lawsuit (see https://        evaluate the claims in the lawsuit         most business income policies do
www.insurancejournal.com/research/          in the context of the actual               NOT cover shutdowns due to viral
app/uploads/ 2020/03/Oceana-                policy form(s) involved and the            pandemics. But, as this article intends
Petition-for-Dec-J-executed.pdf) was        facts and circumstances of the             to demonstrate, even if they did, the
filed in district court in New Orleans      coronavirus pandemic, including            amount of coverage available would
seeking a declaratory judgment              the governmental orders impacting          likely be minimal at best.
about whether the business income           many businesses.                           The Lloyds policy in question,
coverage in a Lloyds property policy        Let me offer two caveats before I          according to the copy I received,
would cover a government-mandated           begin. First, I am not an attorney         offers coverage under the ISO CP
shutdown or curtailment of a                and nothing in this article should be      00 30 10 12 – Business Income (And
restaurant due to the coronavirus.          construed as offering any type of legal    Extra Expense) Coverage Form,
The policyholder law firm filing the        advice. My goal is to offer a coverage     an industry-standard form and
suit asserted in a press release            analysis based on policy language          probably the most common business
that, “The policy issued by Lloyds          and logic. Second, insurance is not a      income coverage policy found in the
of London provides coverage for             commodity. Policy forms are different      insurance marketplace. With that as
a civil authority shutdown and              and the analysis in this article largely   the coverage basis for this article, let’s
does not contain an exclusion for           addresses one industry-standard            review the assertions in the lawsuit.
a virus pandemic.” As we shall see,         form which, by chance, happens to be       Policy Exclusions
the absence of a specific exclusion         the form used in the Lloyds policy.
doesn’t mean there is coverage if                                                      The lawsuit’s “FACTUAL
                                            There have already been numerous           BACKGROUND” claims that the
the insuring agreement is never             articles written, many by attorneys,
triggered. In addition, a literal reading                                              Lloyds policy provides “all risk
                                            opining whether or not most                coverage.” It then goes on to say that
of the policy indicates that it, in fact,   business income policies cover
does not provide coverage for a civil                                                  “An ‘all risk policy’ is an insurance
                                            business interruptions caused by           policy which covers all risks unless
authority shutdown of this type.            viral pandemics and any resulting          clearly and specifically excluded.”
The press release goes on to say, “We       shutdowns imposed by civil                 That is not technically a factual
filed this action because we have           authorities. Many of these articles        statement. Presumably, it’s made
reason to believe that Lloyd’s took         cite specific case law dealing with        to support the statement two
premiums without the intention of           pollution exclusions and what              paragraphs later that, “The policy
providing the indemnity paid for.”          constitutes “direct physical loss” in      does not provide any exclusion due
If there is no intent to cover losses       policy insuring agreements. At the         to losses, business or property, from
caused by a viral pandemic (almost          end of this article, I’ve included links   a virus or global pandemic.”
certainly the actuarial intent), then       to some of these articles, particularly
no premiums were taken to provide           an excellent one entitled “Commercial      The absence of a specific exclusion
coverage that does not exist or was         Property Insurance Coverage and            doesn’t create coverage. Coverage
not intended to exist. The assertions       Coronavirus” by attorney Shannon           is created initially by the policy’s
in the suit for potential fraud appear      O’Malley of Zelle LLP.                     insuring agreement(s). Sometimes an
to be patently absurd.                                                                 exclusion is included in a policy simply
                                            The consensus of most legal pundits
The purpose of this article is to           and insurance experts is that
                                                                                                             (Con’t on page 17)

Maryland Messenger          2020 MAY/JUN                                                                                    16
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