Steve Raptis in Risk & Insurance: Can Insurance Really Save Retail and Hospitality from the Coronavirus Pandemic'

March 18, 2020
Risk & Insurance quoted Haynes and Boone, LLP Partner Steve Raptis in an article about how retail, hospitality and entertainment companies are turning to their insurance policies for protection against COVID-19-related business interruptions and possible liability claims.

Here is an excerpt:

In addition to the risks of the virus itself, retailers and those in the hospitality industry may also face lawsuits from guests, patrons and shareholders based on their response to the epidemic.

Guests could bring lawsuits against hotels or retailers, for example, if they claim the company knew an employee was infected with coronavirus and didn’t properly alert its patrons or take appropriate precautions. “That’s going to be a big one,” said attorney Stephen Raptis, partner in the Insurance Litigation Practice Group at Haynes and Boone.

Another type of suit companies could face is shareholder derivative lawsuits. If a company’s shareholder alleges that they mishandled the virus and as a result the stock dropped.

“I think that companies whose stock prices are already suffering generally as a result of the decline in the stock market are likely to get shareholder derivative suits,” Raptis said.

Coverage Options

Property policies and business interruption coverages may cover some of the costs the retail and hospitality sectors are facing due to coronavirus.

“Most companies will look to their business interruption policy,” Raptis said. “Most companies as a part of their property policy have business interruption and contingent business interruption coverage.”

The biggest obstacle companies will face when trying to activate their business interruption coverage will be whether or not coronavirus caused any direct physical loss to their business, Raptis said.

“Let’s say you’re a hotel and you’ve had an individual who have known to have contracted COVID-19 on your premises, I think there’s going to be a pretty good case to make that those individuals being on your premises and contaminating them with the coronavirus is an actual, physical loss,” he said.

To read the full article, click here.
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