As the COVID-19 pandemic continues, so does the deluge of litigation stemming from property insurers' denials of COVID-19 business interruption claims. Much of the debate between carriers and policyholders concerns whether the coronavirus or the COVID-19 shutdown orders caused "direct physical loss of or damage to" the insured's property. The Eleventh Circuit's recent opinion in Mama Jo's Inc. v. Sparta Insurance Co., while not related to COVID-19, arguably supports the ... Keep Reading »
DC Court Finds No Coverage for COVID-19 Losses Where Plaintiffs Could Not Show That Property Sustained Direct Physical Loss
For going on five months, the United States has been dealing with the difficult impact of the COVID-19 pandemic, which has disrupted daily lives and sometimes devastated businesses. In looking for sources of economic recovery, businesses want to turn to their commercial property policies, but, as this blog has explained, these policies are unlikely to provide the coverage business owners seek because there must first be "direct physical loss of or damage" to the insured ... Keep Reading »
Two Early Rulings in Favor of Insurers in COVID-19 Insurance Coverage Litigation
The U.S. District Court for the Southern District of New York and the Pennsylvania Supreme Court recently issued two of the first substantive rulings in COVID-19-related insurance coverage lawsuits. Both rulings were in favor of insurers. Southern District of New York Indicates COVID-19 Does Not Cause Direct Physical Loss or Damage, As Needed to Trigger Business Interruption Coverage In Social Life Magazine Inc. v. Sentinel Insurance Co., an ongoing lawsuit, the ... Keep Reading »
COVID-19 Insurance Coverage Class Actions
Over the last several months, there have been numerous lawsuits filed across the country by policyholders seeking business interruption insurance coverage for losses they claim are resulting from the COVID-19 pandemic. In the last month, the new trend has been to file many of these claims as class actions. Several of the nation’s top plaintiff-side class action law firms have filed class action lawsuits seeking coverage for nationwide classes of policyholders. These ... Keep Reading »
Louisiana, Pennsylvania, and South Carolina Join in Introducing Legislation That Would Force Insurers to Retroactively Cover COVID-19 Losses
An increasing number of state legislatures have recently introduced measures that would require the insurance industry to bear much of the burden of business interruption and other losses due to the economic downturn brought on by the global COVID-19 pandemic. Louisiana, Pennsylvania, and South Carolina are among the latest states to join in proposing legislation that would require retroactive coverage for business interruption losses related to COVID-19, despite ... Keep Reading »
Are COVID-19 Business Interruption Claims Appropriate for a Coverage Class Action?
Over the last few weeks, a tsunami of lawsuits has been filed in many states alleging a variety of issues related to the global COVID-19 pandemic. The lawsuits have targeted a variety of industries, such as banking and financial services, travel and hospitality, and retail. The property and casualty insurance industry has also been in the news as likely hundreds of thousands of policyholders have faced shutdowns of their businesses. These policyholders have looked to ... Keep Reading »
A New Bad Faith Trend Emerges in COVID-19 Business Interruption Litigation
With governments across the world ordering the shutdown of restaurants, bars, and other “non-essential” businesses due to the COVID-19 pandemic, business interruption insurance claims are, not surprisingly, on the rise. While typical commercial property policies require “direct physical loss or damage” to property — a requirement that is unlikely satisfied by the shutdowns — policyholders are getting creative, alleging that the potential presence of the novel coronavirus ... Keep Reading »
New York Among the Latest States to Propose Legislation That Would Require Insurers to Cover COVID-19 Business Interruption Losses
We previously described here proposed New Jersey legislation that would also compel coverage of business interruption claims based on COVID-19 losses. The New Jersey bill was voted out of the New Jersey Assembly’s Homeland Security and State Preparedness Committee but continues to be the subject of negotiation among insurance industry representatives and the bill’s sponsors. Ohio, Massachusetts, and now New York have since followed New Jersey’s lead, introducing bills ... Keep Reading »
Business Interrupted: Policyholders Seek to Avoid the “Direct Physical Loss or Damage” Requirement for Business Interruption Insurance in the Wake of the COVID-19 Pandemic
The COVID-19 pandemic has swept the world, altering every aspect of daily life — whether it be a morning trip to the gym, a day at the office, a dinner at the Italian restaurant across the street, or a Friday night concert in the park. Businesses, particularly those in the service sector, have halted or restricted their operations, either voluntarily or by government order, in an effort to curb the spread. In these uncertain times, many businesses want to seek coverage ... Keep Reading »
New Jersey Proposes Bill That May Require Insurers to Cover COVID-19 Business Interruption Losses
As the United States faces a surge in confirmed cases of COVID-19, New Jersey is proposing a bill that would require property insurers that cover risks in New Jersey to pay for business interruption losses due to the disease, despite their policies expressly excluding coverage for losses due to viruses or bacteria. The law, which would take effect immediately and be retroactive to March 9, 2020, is aimed at reducing the financial impact of the coronavirus on New Jersey’s ... Keep Reading »