Ernest Martin in Law360: Ebola Crisis Sparks Concern About Coverage For Quarantines

10/30/2014

The threat of the spread of Ebola in the U.S. has left hospitals and other policyholders worried about coverage for quarantines and other disease-related occurrences, with questions arising about the applicability of certain exclusions and the triggering event for coverage under property damage and business interruption policies...

Exclusions for claims arising out of exposure to bacteria probably wouldn't apply to Ebola claims, given the differences between bacteria and viruses, according to attorneys. Insurers likewise would have a difficult time invoking the pollution exclusion, which bars coverage for damages stemming from the release of contaminants or irritants, attorneys say...

Insurers may also assert the "expected or intended injury" exclusion, but they would likely face a high bar in that instance as well, as courts usually require a subjective test in determining whether the insured expected or intended the injury — a test which is often difficult to establish, according to Ernest Martin, a partner in Haynes and Boone, LLP's Dallas office. 

"I could envision a scenario where an insured who travels to or transacts business in affected areas could be denied coverage based on the 'expected or intended injury’ exclusion, with the carrier taking the position that the insured should have expected those injuries," Martin said. "That would be a stretch, but that may be an exclusion facing the insured."

Excerpted from Law360, October 30, 2014. To view full article, click here (subscription required).

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