Here Come the Lawsuits: Business Interruption Insurance Policies and COVID-19

Businesses (principally restaurants), that were required to shut down as a result of various “stay at home” state orders related to COVID-19 have begun filing lawsuits against their insurers. Principally, the businesses are arguing that the loss of revenue is covered under the business interruption provisions in their “all-risk” insurance policies or, under some policies, the civil authority provision.

Various insurers have taken the position that the business interruption coverage does not apply because the insured cannot point to any direct physical damages. Other insurers have denied claims asserting that a viral contamination exclusion applies. Several state legislatures have stepped into the fray, drafting provisions aimed to expressly prohibit an insurer from denying claims on such grounds.

At this time, none of the legislative proposals have been enacted into law and none of the lawsuits have been decided. In these uncertain times, Laurie & Brennan is here to assist you in evaluating your potential claims and options.