Insurance Bad Faith: The Hidden Cost of Supply Chain Delays


The company has also informed the court that it never received a complete copy of the policy, making it difficult to understand the reasons for the coverage denial. Blockheads LLC argues that its policy does not contain the “loss of market caused by delay(s)” exclusion cited by Zurich in their denial of coverage. Without a full copy of the policy, the company said it has to guess how Zurich came to this conclusion.

The delays and subsequent losses incurred by Blockheads LLC have been devastating for the small business, as it had to rely on a salvage sale of the delayed product to mitigate losses. This has resulted in a material loss for 2021 on its financial statements that restricted its ability to gain financing for the following year.

The impact of COVID-19 on the economy has proven to be a major challenge for small businesses like Blockheads LLC. The company’s attorney, James R. Lawrence III of Envisage Law, stated that the impact of supply chain delays on small businesses can be catastrophic, as they often do not have the resources to absorb such losses.