With Events Cancelled by Coronavirus, It's Time to File Claims -- and Brace for Lawsuits

The question of cancelling an event is now almost a moot point, as much of the world slips into quarantine mode. This is the time to consider whether you’ll recover any losses or even face litigation related to COVID-19 contagion linked to recent meetings.

"If you think you might have a claim under event cancellation insurance, or even your property or business interruption policy, then make it," advises Alexandra Roje, a partner in Lathrop GPM's Insurance Recovery practice. "It doesn’t cost you anything to make a claim, and then let the insurance companies respond.

"At this point," Roje added, " we don't really know how they're going to evaluate these claims. But those of us who have been in the business of suing and fighting with insurance companies for decades have a sense of how they're going to respond." With 20 years of such experience, she offers some insights and advice for meeting professionals.

Do most businesses have event cancellation insurance?
Unfortunately and surprisingly, a lot of organizations that are in the business of putting on events have not purchased event cancellation coverage. Or, if they have, they purchased the Pinto version as opposed to the Ferrari version of the coverage. And so, they might not have coverage for disease outbreaks. That type of coverage is available, and if you purchased it, great. But sometimes people just go with the cheapest quote.

Does a midrange policy, maybe the Toyota version, cover a disease outbreak?
Most garden variety policies are not going to cover disease outbreak, but some will. Event coverage is not like your general liability coverage. It is a nonstandard form — something that you can negotiate. If you're in the hospitality industry, especially, you should know that for additional premium, those coverages are certainly out there and available.

What should planners be doing if they intend to file a claim?
Definitely document your losses. Now would be the time to do that. If there's something you can do to quantify what the losses are, collect that information now.

Going forward, will insurance companies will continue to offer disease coverage, or charge a lot more for it?
Yeah, and they'll probably exclude coronavirus. You might be able to buy it, but if you're buying it now it’s unlikely you're going to be able to get it for coronavirus because it's already a known issue. If you purchased it before January, when all of this started, then you're probably in good shape. Certainly, if you're purchasing it now, you're not going to be able to get coverage going forward for coronavirus.

Do you expect to see lawsuits or insurance claims from people who have contracted COVID-19 at a conference?
Yes, but they’re going to have a problem, perhaps, with showing causation. There was that event in Boston that apparently caused a large number of cases linked to the coronavirus outbreak to in Massachusetts. Those are specific facts.

Let’s just assume that you could link it to an event. You could say, "look, I attended this meeting and I was infected by this person who had the virus, and we now know that that's how I got it." I expect that those people or a class of those people represented by an aggressive plaintiff's lawyer might be able to make an argument that they have been injured as a result of the negligence of the event planner, because either the event should have been cancelled or they didn't take precautionary measures, or they had policies in place but they weren't enforced, and so on and so forth.

What else would you advise meeting and event planners from an insurance perspective at this point?
I would advise them to take a close, hard look at their insurance policies. And if they need help, talk to a broker or talk to a lawyer. Don't just assume you're going to have coverage or that you're not, you just don't know until you really look at the policy language.

The most important advice is, do what you need to do to mitigate your losses. Act as if you are uninsured, whether or not you are. If you have an event cancellation policy, and you've given notice to your insurance carrier and they are on board with you, then you need to cooperate with them and keep them apprised of everything that's going on.

Do you think event organizers will now require that participants agree, in all that fine print you need to sign off on, that the host is not responsible for any illness contracted at the event?
Absolutely! Ultimately, those types of claims are negligence claims, and you can require that people wave them. Anyone who's stepped onto an ice-skating rink knows that before you put those skates on, you have to sign away virtually all your rights. I expect that will likely happen down the road with event planning — as it should. Then you are saying "attend at your own risk."

Right now, the decision to cancel is clear. What should we be doing when this crisis starts to settle down? What should guide our decisions?
Whatever you do, don't do anything based on whether you will or will not have insurance. Don't let the tail wag the dog. These insurance issues will get resolved in their own time. And one thing I know about insurance is that, at least in the business context, nothing gets resolved quickly. It is very rare that you're going to get something resolved quickly, especially when insurance companies have concerns about opening the floodgates.

Just act as a reasonably prudent uninsured person or business would act, because down the road if you don't do what a reasonable person should do, you could be subject to liability issues. Say you looked into your insurance and you didn't think you could recover the monetary loss of cancelling. If you use that fact to make your decision to go ahead and have the meeting, then you're opening yourself up to liability if people end up getting sick or dying.
Don’t let the ins and outs of an insurance policy dictate how you're going to react to any particular situation. Be prudent; do what you need to do.