Mixed Results in Litigation on Whether Business Interruption Policies Cover Pandemic-Related Losses

At the onset of the coronavirus pandemic, many entrepreneurs and business owners hoped their business interruption insurance policies would cover losses incurred by the state mandated shutdown. While some businesses remained operational as “essential businesses,” many ground to a halt. At first glance, insurance policies didn’t give businesses any relief but a tsunami of legal challenges may change the tide.

Scrambling to understand what would happen next, businesses owners reached out to their insurance brokers. Many were told no coverage would be available because policies are designed to cover income losses associated with physical damage such lost income following closures due to flood or fire.

Brokers nearly universally assumed a virus did not qualify physical as physical damage.

Despite early indications that interruption insurance polices would not be a safety net, we previously wrote here that filing a claim would still be prudent and advisable. We believed that such a strategy would allow policyholders to preserve their rights and potentially wait out the results of an anticipated wave of class action insurance litigation.

Read our full discussion of this issue at https://rcbizjournal.com/2020/10/08/judges-are-deciding-whether-business-interruption-policies-cover-pandemic-related-losses/

For more information about this article or other issues, please contact us, The Bachman Law Firm PLLC at judith@thebachmanlawfirm.com or 845-639-3210

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The Bachman Law Firm PLLC helps business clients with matters including lawsuits, collections, real estate, contracts, corporate issues, and trademarks and copyrights. With offices in New City, the firm serves clients in New York and New Jersey including those in Manhattan, Bronx, Queens, Brooklyn, and Rockland, Westchester, and Bergen. 

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