Insurance Law

Volunteer lawyers helping Boston business owners note employee, insurance issues


Corrected: Business owners dealing with the aftermath of the Boston marathon bombings will be facing legal issues ranging from insurance coverage to compensation for injured employees.

More than 400 businesses were forced to close during the bombing investigation and a handful suffered property damage, according to the Boston Globe.

Insurance claims for business interruption, property damage and relocation expenses are among the legal issues likely to be encountered by businesses, the Boston Business Journal (sub. req.) reports. The publication spoke with J.D. Smeallie, a partner at Holland & Knight who is president of the Boston Bar Association, which is offering pro bono help to small businesses affected by the tragedy.

Smeallie told the publication of a pressing problem for small businesses: an insurance provision that excludes losses caused by terrorist acts. “A terrorist exclusion is typical on many policies,” he said.

Insurers began excluding coverage for terrorism after the Sept. 11 attacks, according to the Boston Globe story. A report issued last fall by the Congressional Research Service estimated that only 60 percent of U.S. businesses are insured for losses caused by terrorism. A federal reinsurance program offers terrorism coverage, but benefits don’t kick in unless the government certifies that the event constituted terrorism. As a result, business owners without the terrorism rider will claim the bombings didn’t constitute terrorism, while businesses with coverage—typically larger businesses—will hope for the government terrorism designation, ABC News reports.

Another issue is whether workers compensation insurance will cover injured workers, according to Will Hannum, one of the Boston Bar Association volunteers, who also spoke with the Boston Business Journal. Employees may have suffered emotional as well as physical injuries, making it difficult to return to work, according to Hannum, managing partner of employment law firm Schwartz Hannum.

Hannum said businesses also could “get themselves in trouble” if they take actions perceived as unfair, such as firing employees who are too upset to work.

The Boston Bar Association sought volunteer lawyers to help small businesses in response to a request by the city. The bar obtained offers of help from more than 150 attorneys; 20 law firms; and the Boston University, Northeastern and Suffolk law schools, according to the bar’s communications director, Bonnie Sashin.

Meanwhile bar groups are donating money as well as pro bono help. The Boston Bar Foundation donated $25,000 and the Massachusetts Bar Association donated $10,000 to One Fund Boston, the charity established to help bombing victims, according to press releases by the foundation and the MBA. The fund, to be administered by lawyer Kenneth Feinberg, has raised more than $20 million as of last Thursday, the Associated Press reports. The fund’s pro bono lawyer is Boston-based law firm Goodwin Proctor, according to the National Law Journal.

The Massachusetts Bar Association is also offering pro bono help to individuals through its Dial-A-Lawyer program, according to a press release.

Prior coverage:

ABAJournal.com: “Will the Boston Marathon bombings qualify as terrorism for insurance purposes?”

Updated at 6:38 a.m. to correctly state that the Massachusetts Bar Association is holding the Dial-A-Lawyer program and donating $10,000 to victims.

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