By Jeff Sistrunk

Law360 (June 17, 2020, 1:20 PM EDT ) Blank Rome LLP insurance recovery partners Jim Murray and Linda Kornfeld recently spoke with Law360 about how their practice group has been tackling clients' claims for business loss coverage amid the COVID-19 crisis, while adjusting to the new normal of working from home.

This interview has been edited for length and clarity.

How has your practice group adapted to the pandemic?

Murray: Our group consists of 32 of us now in several offices, including New York, Washington, D.C., and Los Angeles. We collaborate and pitch work as a group. We are not limited by offices. I have not had a single case at Blank Rome that has not included at least one lawyer from one of the other offices.

Our group would typically have a monthly meeting of 45 minutes to an hour, where we discuss key cases and developments. We had always done that by video in our offices. When the pandemic hit and we finally ended up closing, we went from 14 offices to 1,000 home offices. For the insurance group, though, it was in some respects business as usual, as we continued with those meetings, bumping them up to every Friday instead of every month. We limit the meetings now to 30 minutes, and every week we have a speaker talk about one of their cases. We have had a lot of discussion about coronavirus cases, what we will and will not be doing in this area.

Kornfeld: It has really been a great thing to have such a close group in this pandemic situation. In my career, I have never been involved in any situation of this scope, where everyone in the group is thinking about the same issues at the same time. 9/11, Hurricane Katrina, Hurricane Sandy and other large-scale events in the past were geographically specific, where this event is impacting most everyone everywhere.

We are all reading insurance policies on a daily basis and analyzing those policies. We have such strong friendships that we are on the phone with each other all the time, trading ideas about policy language and potential arguments. Since we are such a tightly knit group, we have been able to use that fact to bring sophistication of analysis and thought to bear. We are putting all these smart coverage brains together and focusing at the same time on this specific issue, coverage for the pandemic. The level of intellectual discussion has been a silver lining of this situation.

For the firm as a whole, across all practice areas, we have been in much closer contact. Most everyone's clients have had some issue relating to the pandemic.

What pandemic-related work has the group been doing?

Murray: We probably have a couple dozen insurance files open, and have looked at many, many more. We have tried to be strategic in acknowledging the obvious: There is a spectrum of policy language and state laws at issue here.

Even with [the Comprehensive Environmental Response, Compensation and Liability Act] claims under general liability policies in the '60s, '70s and '80s, where the policy language was essentially the same, you still had 50 different states. You could have full coverage in the state of Washington, and no coverage in the state of Maine. Here, the challenge with these policies is that, while there is standard form language and principles we are used to in the all-risk or property contexts, there is a great deal of variation.

On one end of the spectrum, you have a policy with a virus exclusion post-2006, a pollution exclusion that also encompasses viruses, and a carveout for loss of use in the definition of physical injury. On the other end of the spectrum is a policy with none of those exclusions and very robust loss of use coverage. We are always looking at cost-benefit analysis for the client, and some of those issues will be more challenging than others.

Here, we are very bullish on the argument that the virus is contaminating property and causing loss of use. We are boring down on this and other arguments.

Kornfeld: We have created a catalog of policy forms from top to bottom, that is, the most and least favorable forms to argue for coverage.

If you have an insurance policy with a specific COVID-19 exclusion, for instance, then good luck. Right above that may be a policy with a highly specific infectious disease exclusion. That could create difficult arguments as well. Then, toward the top of the list, you have forms with the types of terms that Jim mentioned.

By creating this catalog, we can quickly determine where a specific form falls on this list, which can help us to efficiently advise our colleagues and clients on how aggressive they should be in pursuing their claims.

Murray: Certain issues are more prevalent in a specific region. As an example, Los Angeles, there are a lot of policyholders in the entertainment industry, some of whom have production policy or event cancellation insurance issues. Some of those policies look golden, while others have the infamous pandemic exclusion.

What do you think of efforts to centralize COVID-19 coverage cases?

Kornfeld: The MDL concept here, when it was first raised, was interesting. It was something I thought the insurance industry would grab onto, to put all the cases together and make an argument about the overall impact on the industry. But it has not gained traction with the insurers.

There are so many complications with an MDL in this situation, given the spectrum of policy language and state laws. We will see what happens. Right now, we have litigation in almost all 50 states, and a lot of lawsuits have yet to be filed. We could definitely end up with thousands of lawsuits in state and federal courts across the country, and litigation chaos regarding pandemic coverage issues — and that is just as to business interruption policies.

If you have different courts across the country ruling on identical business interruption coverage issues and policy forms in different ways, that could be problematic. The question becomes, would an MDL solve that potential problem or is there another mechanism that can or should be used to consolidate issues or allow for early resolution of others? There are brilliant lawyers on both sides of the fence, representing insurers and policyholders, and brilliant judges who are going to need to think creatively about whether there is some basis to consolidate issues that are so important to resolve efficiently for businesses in dire financial straits.

We have a lot to think about. I just don't know that any of the existing processes we have would be suited to this situation, but there are a lot of smart people involved here. We should come together to try to find a way to help alleviate what could otherwise be a chaotic situation.

How have you been spending time outside work?

Murray: My commute was about 20 minutes, so now instead of that, I walk an hour a day. I am a guitar player and keep a guitar in my office. Now, I can take a break and play here and there.

I have a sixth-grade daughter, so I am learning sixth-grade math and pretending to teach it to her (laughs). I also cook pancakes on Saturday and Sunday mornings.

Kornfeld: Everyone has been saying it is 'Groundhog Day.' On a given day during the pandemic, I cannot tell you what day it is. You have to have boundaries. I have made it a point to stop every Friday at 5, and we will have a cocktail.

I am an equestrian, and my horse lives pretty close to my home. During the week, riding was almost never an option before, given my commute. During the pandemic, I have cut out time at least once during the week and definitely on the weekend to ride my horse and spend more time at the barn. That is an old hobby that has become much more frequent.

--Editing by Rebecca Flanagan and Marygrace Murphy.

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