Amy Gore—Senior Attorney, National Legal Research Group

            During this pandemic, many business owners believed that valuable coverage they had purchased for the businesses would provide a source of some financial security. Prudent business entities purchased business interruption coverage to "indemnify the insured against losses arising from the inability to continue the normal operation and functions of the business, industry, or other commercial establishment insured." Annotation, William H. Danne Jr., Business Interruption Insurance, 37 A.L.R. 5th 41 (1996 & Westlaw 2020). A typical event that has triggered this kind of coverage would be a fire or a hurricane, or some other natural disaster that caused damage to the business premises and closure of the business.

            Today, more and more businesses have discovered that the claim to recover this valuable coverage is being denied by insurers. The need by the insurance industry to stop an anticipated onslaught of claims arising out of the pandemic is evidenced by the fact that "[i]n mid-March 2020, in response to inquiries from members of the United States House of Representatives, the CEOs of four leading insurance industry trade organization[s] jointly signed a letter stating, 'Business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.'"

Amy Gore—Senior Attorney, National Legal Research Group

            The area of presumed intent in the designation of life insurance policies has long been a source of dispute and litigation. When a state legislature enacts statutes that address an automatic revocation of insurance beneficiary status under particular circumstances, additional litigation is likely to result. Such was the case in Sveen v. Melin, 138 S. Ct. 1815, 1817 (2018). There, a couple were married in 1997 and the following year the named insured designated his wife as the primary beneficiary under his life insurance policy, and his two children from a prior marriage as contingent beneficiaries. The couple divorced in 2007, and the divorce decree never addressed the disposition of the life insurance policy or the rights of the contingent beneficiaries. Upon the named insured's death in 2011, both the wife and the two children made competing claims for the entire proceeds. The children of the named insured relied on Minnesota Statutes § 524.2-804, subd. 1, which provided that divorce revoked the beneficiary designation of any former spouse. The former spouse asserted that the statute, which was not in effect at the time the policy was purchased and the time she was designated as a beneficiary, violated the Contract Clause, U.S. Const. art. 1, § 10, cl. 1.