<p style="text-align: justify;">Recent court decisions on "business interruption" coverage claims related to COVID-19 seem to be tentatively favoring insurers with respect to claims for lost income during the COVID-19 pandemic.</p>
<p style="text-align: justify;">Several jurisdictions have ruled for insurance companies, including state courts in California, Michigan and the District of Columbia, as well as in federal courts in Texas and California. Two other judges have indicated that they would rule against COVID-19 claims brought by a Miami restaurant and a magazine publisher. In fact, the publisher, Social Life Magazine, withdrew its case before a Manhattan federal judge issued a written opinion.</p>
<p style="text-align: justify;">However, many lawyers for policyholders aren’t giving up hope, as many suits are awaiting a decision, and appeals courts have yet to rule. In addition, many lawyers for insureds are focusing on a Missouri federal judge’s Aug. 12 ruling allowing business interruption claims to proceed. As insurers are aware, many business interruption policies require “direct physical loss or damage” to property for coverage to apply. Others specifically exclude coverage for damage caused by viruses. The plaintiffs in the Missouri business interruption case had argued that the coronavirus is a physical substance that attached to and damaged their properties, and their all-risk policies should cover lost income. The policy in the Missouri case did not exclude virus damage but did require a direct physical loss.</p>
<p style="text-align: justify;">In an interesting indication of things possibly to come from COVID-19 business interruption litigation, the Insurance Information Institute said the federal government, rather than insurers, should help. As court losses mount, a coalition of small businesses is backing a House bill, the Business Interruption Relief Act. The bill would create a voluntary program for insurers to pay claims and obtain reimbursement from the federal government.</p>
We will continue to keep you updated as events progress.
<p style="text-align: justify;">Thanks to Joseph S. Anzalone for his contribution to this post. If you have any questions or comments, please contact <a href="mailto:firstname.lastname@example.org">Colleen Hayes</a>.</p>