Houghtaling Loses BI Coverage Claim
February 18, 2021

A New Orleans judge has denied a motion that would have forced an insurer to pay a business interruption (BI) claim to a restaurant closed because of COVID-19.

The case is particularly significant because it was the first known legal action filed against insurers over COVID-19 and BI. 

The motion, brought by well known class action attorney John Houghtaling II, joins a pool of nationwide rulings that have been overwhelmingly decided in favor of insurers. As in many similar cases, the ruling came down to the physical damage requirement present in most BI policies.

From Claims Journal:

Attorneys who represent insurers laid the groundwork to deny virus-related business-interruption claims early on. They argued that coverage is not triggered under commercial property policies without some tangible physical alteration to the insured property.

State and federal judges around the country have ruled in favor of insurers in motions to dismiss or for summary judgment in about four cases out of five so far.

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