In this period of economic uncertainty, with seemingly new sources of significant widespread losses appearing weekly, individuals and businesses find themselves increasingly looking to available insurance for relief. Insurance carriers have received more than 60 million claims since March, and previous weekly claim filing records have been surpassed time and time again. With an unprecedented number of claims has come an unprecedented number of coverage denials—many of which are based on exclusions in policies.
For far too many, the receipt of a denial letter that reasonably describes why insurance is not available is the end of the road. However, the burden that insurance carriers have to meet in denying coverage, particularly when they are relying on an exclusion, is incredibly high. Applying this high burden, New York courts have established that certain common insurance phrases, such as “arising out of,” have precise legal meanings which, when applied, can negate a carrier’s seemingly reasonable basis to disclaim coverage.
