Open Access
Yashas Malik
- Law Student Vivekananda Institute of Professional Studies, Guru Gobind Singh Indraprastha University New Delhi India
Abstract
The COVID-19 pandemic came with a roar and attacked the globe, which resulted in national lockdowns to control the spread of this deadly virus. Such cross-border and domestic movement restrictions have impacted businesses significantly throughout the globe, leading to cancellation or postponement of various sports and entertainment events, including Tokyo Olympics 2021, which was scheduled for mid of 2020 and IPL 2021 suspension- due to deadly second wave in India. While one may have an impression of being safe under insurance cover on such business interruptions and event cancellations, but such claims are likely to face certain issues. Since most of the prevailing underwriters in the market did not issue many policies which covers the loss due to direct impact of a pandemic, simply because if all the insurances were to cover such losses, then insurers do not have enough resources or the amount of claims they’ll be exposed to will be astronomical and abnormally large for any insurance company to account for. But, if the perils do not exclude such instances, then the principle of ‘contra proferentum’ will come to shine the claimant’s armor. The author in his work tries to determine the scope of exclusions and reaction of courts with regards to application of principle of ‘loss of utility’ to insurance contracts having direct impact of the pandemic, whilst focusing on intertwined concepts of act of God and frustration and further elaborating
Keywords: COVID-19, pandemic, insurance, virus, contra proferentum, act of God
[This article belongs to Journal of Banking and Insurance Law(jbil)]
Browse Figures
References
1. Industrial Promotion & Investment Corpn. of Orissa Ltd. v. New India Assurance Co. Ltd., (2016) 15 SCC 315 and Central Bank of India v. Virudhunagar Steel Rolling Mills Ltd., (2015) 16 SCC 207
2. Black’s Law Dictionary, Sixth Edition, Page 33.
3. Middaugh v. U.S., D.C.Wyo., 293 F.Supp. 977, 980.
4. Divisional Controller, KSRTC v. Mahadeva Shetty, (2003) 7 SCC 197 : 2003 SCC (Cri) 1722 at page 201.
5. These principles were developed in case of Ryland v. Fletcher (1868) LR 3 HL 330 (landmark judgement on strict liability)
6. Universal Image Productions v. Federal Insurance Co., 475 Fed. Appx. 569 (6th Cir. 2012).
7. Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399, 406 (1st Cir. 2009).
8. Mama Jo’s, Inc. v. Sparta Insurance Co., No. 17-cv-23362-KMM, 2018 U.S. Dist. LEXIS 201852.
9. Columbiaknit, Inc. v. Affiliated FM Ins. Co., No. Civ. 98-434-HU, 1999 WL 619100.
10. Gregory Packaging Inc. v. Travelers Property Casualty Co. of America, 2014 WL 6675934).
11. Port Authority of New York and New Jersey v. Affiliated FM Insurance Co., 311 F.3d 226 (US Court of Appeals, 3rd District).
12. Wakefern Food Corporation & Ors. v. Liberty Mutual Fire Insurance Co., 406 N.J. Super 524: 968 A.2d 724, Superior Court of New Jersey, Appellate Division.
13. The Western Fire Insurance Co. v. The First Presbyterian Church, Littleton, Colorado, 165 Colo. 34: 437 P.2d 52, Supreme Court of Colorado.COVID-19: An Act of God? Insurance Perspective Yashas Malik © Law Journals 2021. All Rights Reserved 8
14. JSW Steel Ltd. v. ICICI Lombard General Insurance Co. Ltd., MANU/MH/3792/2018.
15. Studio 417, Inc v. The Cincinnati Insurance Company, 20-cv-03127-SRB.
16. Elegant Massage, LLC v. State Farm Mut. Auto. Ins. Co., CIVIL ACTION NO. 2:20-cv-265, E.D. Va. Dec. 9, 2020.
17. A. Saxena and M. Lakhani, “Covid-19: Absence of legislative intervention may impacy commercial insurance claims,” Cyril Amarchand Mangaldas, 19 May 2020. [Online]. [Accessed 5 May 2021].
18. C. Cohn and N. Hussain, “Insurers face ‘mind-blowingly’ large loss if Olympics cancelled,” Reuters, 27 January 2021. [Online]. Available: https://www.reuters.com/article/us-olympics- insuranceidUSKBN29W1OL. [Accessed 5 May 2021].
19. Corona Kavach and Corona Rakshak policies
20. N. Dubey, “Force majeure clause won’t apply to coronavirus death claims in life insurancepolicies,” Economic Times: ET Online, 7 April 2020. [Online]. Available:
https://economictimes.indiatimes.com/wealth/insure/life-insurance/force-majeure-clause-wontapply-to-coronavirus-death-claims-in-life-insurance-policies/articleshow/75004294.cms.
[Accessed 5 May 2021].
21. IRDAI Notification, dt. 26 August 2020.
Journal of Banking and Insurance Law
| Volume | 4 |
| Issue | 2 |
| Received | June 20, 2021 |
| Accepted | June 29, 2021 |
| Published | June 29, 2023 |