Containing Insurance Losses When Pandemics Strike
Hosted by Nelson Levine de Luca & Horst
Recording Date: May 13, 2009


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First Party Coverage Issues

  • Closure of facilities due to flu contagion or potential contagion
  • Coverage issues relating to business interruption; including loss of income due to business closure or decrease in customers due to detection of flu virus at business (e.g., necessity of business losses resulting from direct physical loss and potential implication of Civil Authority coverage)
  • Coverage issues relating to remediation of businesses and homes infected with flu
  • Livestock losses (compared with Avian flu)
  • Event Cancellation coverage issues
  • Workers Compensation claims (probably most prevelent and involves distinguishing between “occupational” and “infectious” disease)
  • Directors and Officers policy claims (potentially brought by shareholders regarding how companies react to swine flu at the workplace and whether conduct causes financial damage)
  • Travel Insurance (issue of whether trip cancellation was based on actual diagnosis or fear of contracting flu)

Third Party Coverage Issues

  • Is there potential liability due to the failure to act reasonably?
    • Exposure at the source of the outbreak
    • Exposure to common carriers such the airlines and rail systems
    • Exposure up the “entire chain of distribution.”
  • Did the insured take reasonable steps to identify the exposure?
  • Once identified, did the insured take reasonable steps to contain/remediate the pandemic?
  • Is there an aggregate exposure under the policy?
  • Potential Exclusions
    • Expected and intended injury
    • Other policy exclusions
  • What will be the cost of defending the insured?

Reinsurance Implications

  • Which reinsurance agreements are triggered?
  • Is there a “loss occurrence” under the reinsurance agreement?
  • Are there any applicable exclusions?
  • Number of occurrences
  • Allocation of loss



Robert T. Horst, Esq., Nelson Levine de Luca & Horst, Blue Bell, PA
Robert Horst  represents insurers in complex coverage disputes, bad faith litigation, class action defense, and the investigation of suspected fraud.  Mr. Horst is an experienced and effective litigator, having tried over forty cases to verdict before a jury and hundreds more bench trials.  Admitted to practice in Pennsylvania, New Jersey and New York, Mr. Horst has litigated matters pro hac vice in numerous jurisdictions throughout the nation, including Delaware, Ohio, Florida, West Virginia, Oklahoma, Virginia, and Washington. A frequent lecturer on topics related to insurance, the law and law firm management, Mr. Horst has presented to numerous professional organizations, trade groups, claims associations and insurers, including the Federation of Defense & Corporate Counsel, Insurance Society of Philadelphia, Property Loss Research Bureau, Pennsylvania Bar Association, and Pennsylvania Bar Institute, amongst others.  He has published numerous pieces and eagerly awaits the Spring 2009 publication of the text Extracontractual Litigation Against Insurers (Incisive Media) which he co-authored. Mr. Horst has recently been quoted in The New York Times, The National Underwriter, The Legal Intelligencer, and the Jackson Clarion Ledger (Mississippi). In addition to his practice, Mr. Horst presently leads NLdH’s Recruiting and Professional Development efforts and is also proudly serving as General Counsel to the International Association of Special Investigative Units (“IASIU”), the insurance industry’s leading “fraud-fighting” organization, which has 40 chapters worldwide and a membership numbering over 4,000.  He also acts as an expert witness in the area of insurance bad faith litigation and serves as a private arbitrator in insurance coverage matters. Mr. Horst was NLdH’s Managing Partner from 2003 – 2008 and is one of the firm’s founding partners.

kreksteinWilliam O. Krekstein, Esq., Nelson Levine de Luca & Horst, Blue Bell, PA
William Krekstein represents insurance companies in a wide range of insurance coverage matters, including all aspects of property and casualty coverage and bad faith litigation. He has successfully tried cases involving complex coverage disputes and arson, and has secured judgments on behalf of insurers for damages pursuant to Pennsylvania’s Insurance Fraud Act. Mr. Krekstein has obtained summary judgment for insurers on fraudulent misrepresentation grounds, through enforcement of various insurance policy exclusions, application of UM/UIM stacking waivers, claims under Pennsylvania’s bad faith statute and in numerous other complex coverage matters. He has litigated cases in state and federal courts throughout Pennsylvania, New York, and in other states where he was admitted pro hac vice. Formerly, Mr. Krekstein practiced in the areas of commercial litigation and construction litigation. Since joining NLdH, Mr. Krekstein has presented seminars across the country for organizations on various insurance-related topics, including construction defect coverage issues, insurance claims handling, property insurance issues, causation, direct physical loss, appraisal, business income losses, application of exclusionary language in both personal and commercial policies, insurance fraud, and bad faith. He frequently lectures to insurance companies on a variety of coverage and bad faith issues.

nelsonMichael R. Nelson, Chairman, Nelson Levine de Luca & Horst, Blue Bell, PA
is Chairman of NLdH. Mr. Nelson concentrates his law practice on complex insurance matters, insurance class actions, insurance regulatory matters, reinsurance, and bad faith/extracontractual claims. He analyzes insurance coverages and defends claims in matters involving complex coverages, such as construction defects, environmental matters, director and officer liability, errors and omissions, automobile, and life/health/disability. He has represented insurance companies in matters of complex litigation in multiple jurisdictions throughout the country. Mr. Nelson actively participates in a number of legal associations and brings his expertise in insurance matters and corporate defense work to organizations such as the Pennsylvania Defense Institute (PDI), the Federation for Defense and Corporate Counsel (FDCC), Lawyers for Civil Justice (LCJ), and the Defense Research Institute (DRI). Mr. Nelson is frequently asked to speak before insurance industry trade groups such as the Property Loss Research Bureau (PLRB), the International Association of Special Investigation Units (IASIU), the Defense Research Institute, and the Property Casualty Insurers Association of America. He has testified in Washington, D.C. concerning amendments to the Federal Rules of Civil Procedure on class actions and electronic discovery. Mr. Nelson proactively addresses regulatory issues on behalf of the insurance industry by regularly attending conferences and providing commentary before the National Association of Insurance Commissioners (NAIC). He has been awarded Martindale-Hubbell’s highest rating of “A.V.” Prior to becoming a lawyer, Mr. Nelson worked for eleven years for MetLife’s Property & Casualty Company in its King of Prussia, Pennsylvania office. At MetLife he was actively involved in all aspects of claims adjusting, and during his last three years, managed the King of Prussia Claims Office, which was responsible for a six state region.

stalkerTimothy Stalker, Esq., Nelson Levine de Luca & Horst, Blue Bell, PA
Tim Stalker has 30 years of industry experience not only as outside counsel, but also as an officer for both insurance and reinsurance companies. He is a shareholder with the firm of Nelson, Levine, de Luca & Horst in Blue Bell, PA and chairs the firm’s international reinsurance practice. As such, his expertise focuses on reinsurance arrangements, contractual wordings, commutations, coverage analysis, claim presentations, and dispute resolution including litigation and arbitration. He is also a frequent speaker on reinsurance related topics. Prior to returning to outside practice, Tim functioned in numerous in-house capacities. Among those positions held were Vice President of Claims and Legal within the Liberty Mutual Group; Vice President and Counsel for Gerling Global Reinsurance Corporation of America; Vice President, Director and General Counsel for various companies within Crum & Forster Corporation (Talegen). Tim graduated from Rutgers University (B.A.) and New York Law School (J.D.). He is admitted to practice law before the Pennsylvania Supreme Court, the United States District Court for the Eastern District of Pennsylvania and the United States Supreme Court. He was elected to the Federation of Defense and Corporate Counsel in 2006 and is an ARIAS-US certified arbitrator.