by Robert A. Whitney*
*Please note that the opinions expressed in this Viewpoint are solely those of the author and do not necessarily reflect or represent the position of the Massachusetts Division of Insurance.
On Patriots’ Day, Monday, April 15, 2013, the 117th annual Boston Marathon began in much the same way as the previous 116 Boston Marathons had begun, with runners crowding the starting line in Hopkinton awaiting the gun, and thousands of spectators lining the race course to see the racers go by. At the finish line, crowds had gathered to await the winning runners and cheer on the thousands of non-professionals who completed the 26.2 miles from Hopkinton to Boston.
I was one of those people, standing on the right side of Boylston Street facing the finish line, watching for a friend. As my friend ran past me toward the finish line, I cheered and then left the area, heading back to my office at the Division of Insurance. About 20 minutes later, at 2:49 pm, the first of two bombs exploded outside Marathon Sports on Boylston Street. A second blast came 13 seconds later, just before the finish line near Copley Square.
The explosions killed three spectators and injured over two hundred and fifty others. The area around the two explosions—nearly a mile long and three blocks across—was immediately closed off. The Copley Square area did not reopen until April 24, 2013, more than a week after the Boston Marathon bombings.
The Boston legal community immediately stepped up to help the victims and their families. For example, as noted in the Boston Business Journal, the Boston Bar Association (“BBA”) was among the first to provide assistance by recruiting volunteer attorneys. Within ten days of the bombings, some 125 attorneys, five law firms and law students had already signed up to help individuals and small businesses. The Massachusetts Bar Association (“MBA”) also reached out to its membership, asking them to provide free services to affected persons and property owners, including helping victims of the bombings with applications to the “One Fund Boston,” a compensation fund that raised more than $60 million for the victims and their families.
The MBA proposed that victims be permitted to submit personal statements about their injuries and the effect that the bombings have had on their lives, in addition to merely submitting just medical records. BBA volunteer attorneys also helped marathon bombing victims fill out One Fund Boston claims. In total, the volunteer attorneys helped 14 victims complete One Fund Boston claims, including making three home visits to meet with those who are unable to leave home because they were still recovering from physical injuries.
Many local businesses also faced an immediate, major issue after the bombing: whether the damage from the explosions themselves and from the resulting lost revenue, would be covered by their respective insurance policies. The issue turned in part on an important matter of insurance law, namely, whether the bombings at the Boston Marathon could be viewed as an “act of terror.” To much of the general public, there was little doubt that the Boston Marathon bombings were an “act of terror;” even President Barack Obama, in statement on April 16, 2013, said that, although the perpetrators were still unknown, the bombing was an “act of terror,” and that “[a]ny time bombs are used to target innocent civilians, it is an act of terror.”
But from an insurance perspective, the situation was less clear. After the terrorist attacks on “9/11” in 2001, the insurance industry began to write exclusions into business insurance policies, that would preclude coverage relating to business interruption and lost income resulting from “acts of terror.” Many of the insurance policies held by businesses affected by the Boston Marathon bombings contained these so-called “terrorism exclusions.” Of course, determining exactly what is considered to be a “terrorist act” for insurance exclusion purposes is not clear cut. If the Boston Marathon bombings were to be considered “acts of terror,” that potentially would trigger the exclusions contained in local businesses policies, then there might be no coverage available to those businesses for any physical damage and loss income resulting from the explosions.
The Boston legal community responded to these insurance-related issues by offering pro bono legal services to local, affected businesses to help them determine whether they could make insurance claims for losses including business interruption, property damage and relocation expenses, despite any “terrorism exclusions.” As reported in the Boston Globe, one priority for the BBA’s volunteer lawyers was to make sure that business owners were able to file their claims with their insurance carriers in a timely fashion, and to make the best arguments in favor of finding insurance coverage available for any damage.
In the immediate aftermath of the bombings, the Massachusetts Division of Insurance (“Division”) issued a bulletin detailing appropriate procedures for insurers to use in reviewing claims made as a result of the bombings. The Division was concerned that all insurers “promptly investigate all claims for all lines of coverage including, without limitation, business interruption insurance, home insurance, property insurance and health insurance.” The Division also sought to make sure that any insurer’s investigation of any claimed loss was done strictly on a “claim-by-claim basis.”
In the weeks and months following the Boston Marathon bombings, insurers paid the vast majority of the insurance claims made with respect to damages from the explosions, and the Division is unaware of any claims for damages being denied by any carrier because of any “terrorism exclusion.” Insurers may have had difficulty determining exactly what constituted “terrorism” for purposes of excluding insurance coverage, particularly where the definition of “act of terror” might be different in each affected insurance policy, and where the burden would be on the insurer to affirmatively demonstrate the applicability of each policy’s exclusion.
The volunteer work of the MBA, BBA, law firms, individual attorneys and law students in the aftermath of the bombings enabled victims to make claims for compensation for their injuries that they otherwise may not have been able to make. Moreover, affected businesses were likely back up and running faster due to the assistance of the volunteers.
There can be no doubt that the immediate and strong pro bono efforts of these lawyers and law students during this terrible time made a bad situation much better for many individuals and businesses that suffered from the effects of the Boston Marathon bombings.
Robert A. Whitney is currently the Deputy Commissioner and General Counsel of the Massachusetts Division of Insurance, a position to which he was appointed in 2011. Previously in private practice for over 20 years, he has frequently written and spoken on insurance and reinsurance topics.