Medical Malpractice Lawyer Cleveland OH
The lawyers at Mishkind Kulwicki Law represent victims of catastrophic personal injuries, medical malpractice and wrongful death throughout the State of Ohio. In the course of this representation, we have become champions for injury victims in their fight against the insurance companies that profit by preventing the recovery of full and fair compensation. In the course of this representation, we have become experts in reviewing insurance policies and contracts that impact liability. Following is a discussion of contract terms that may affect performance obligations or cancellation rights and insurance provisions that provide business interruption coverage.
The Coronavirus, or COVID-19, is a pandemic that has resulted in massive business interruptions and layoffs. For Ohio businesses, the downturn in economic activity caused by the lockdown has raised many questions about the applicability of contracts and insurance policies to business operations and income.
Contract Rights. Many contracts cannot be performed due to government lockdown. Most contracts include “boilerplate” language meant to cover a wide variety of possible scenarios that might affect performance under the contract. One such provision, called a force majeure provision typically excuses performance in extreme circumstances, such as during war, terrorist activity or resulting from an “act of God.” Many companies have not reviewed their force majeure clause with the thought of a viral pandemic in mind. Therefore, a careful reading of the exact language of the provision is required to determine the parties’ respective obligations.
Aside from actual contractual provisions, several legal principles might apply to excuse performance under a contract or allow cancellation without penalty. Two related doctrines, the doctrine of commercial impracticability and the equitable defense of “impossibility” excuse performance under a contract when a party is not able to carry out the obligations of the contract due to unforeseen or unforeseeable circumstances. Depending on the circumstances, lawyers can often argue both sides of this issue. After Ebola, the Zika virus and SARS, is a viral pandemic truly unforeseen or unforeseeable? Does the scope of the Ohio Governor’s mandate to shelter at home and lockdown nonessential businesses, taken together with the broad exceptions to that mandate, truly prevent a party from performing their obligations under the contract or did a party breach the contract and use COVID-19 as an excuse?
Insurance Coverage. General liability policies typically contain “business interruption” and “lost business income” provisions that provide coverage for lost income caused by an insured event. However, following the 2002 SARS epidemic, insurers revised their policies to add a requirement that business interruption coverage exists when there is a suspension of business operation due to “direct physical loss of or damage to property.” This exclusionary language has been allowed by the insurance-friendly Ohio Department of Insurance. The “direct physical loss” provision refers to damage to the commercial property that prevents the operation of the business, such as flooding, fire, toxic chemical exposure or explosion.
There is scant case law interpreting the “direct physical loss” provision. But, if a cloud of toxic fumes shuts down a business, why wouldn’t a cloud of toxic virus? On the other hand, is the business shutdown really caused by the actual physical presence of virus or the threat of communicable illness? Under Ohio law, a central canon of insurance contract interpretation is that language reasonably susceptible of more than one meaning will be construed liberally in favor of the insured and strictly against the insurer. U.S. Fid. & Guar. Co. v. Lightning Rod Mut. Ins. Co. (1997), 80 Ohio St.3d 584, 586, citing King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208, 519 N.E.2d 1380, syllabus.
Other exclusionary language in the policy might control the debate. For example, some policies include language that prevents application of business interruption insurance when the business is shut down due to a government mandate, like the imposition of martial law. Likewise, policies may include a specific exclusion for bacterial, fungal or viral outbreaks. One policy that I reviewed excluded losses caused by the following source: “bacterial, fungal and other microbes.” “Microbe” is commonly defined as a living microorganism, while viruses are not living. Could this poorly written policy provision allow claims for shutdowns related to a viral epidemic?
Insurance policies can be written to cover any potential loss. Therefore, policy language, endorsements, declarations, and exclusions must be carefully reviewed to determine the applicability of your policy to cover business losses caused by the economic consequences of the Coronavirus. There will be many lawsuits that arise out of the Coronavirus epidemic and resulting government lockdowns.
For more information about health insurance claims, contact us today to consult with a medical malpractice lawyer Cleveland, OH residents recommend.