Usage-Based Insurance Gets Confidence Boost During Covid-19 Pandemic

New Insurance Advisory Board Seeks Technological Solutions To Disaster Resilience


ICYMI: Policyholder Loses Federal Appeal of Business Interruption Ruling

Business Insurance was one of the few media outlets to cover a federal appeals court’s ruling earlier this month in favor of an insurer in a COVID-19-related business interruption (BI) insurance coverage dispute. The first two paragraphs of the trade publication’s story (Policyholder loses federal appeal of BI ruling) are below:

“In what may be the first federal appeals court ruling on the issue, the 8th U.S. Circuit Court of Appeals on Friday [July 2] ruled against an oral surgeon’s practice as to whether a policyholder can recover for COVID-19 losses under its business interruption coverage.

In its ruling in Oral Surgeons, P.C. v. The Cincinnati Insurance Co., a three-judge panel of the St. Louis-based appeals court agreed with the U.S. District Court in Des Moines, Iowa, that the practice’s policy required ‘physical loss’ or ‘physical damage’ to trigger business interruption and extra expense coverage.”


Triple-I Launches FAIR 2.0

Good afternoon,

Building upon the success of its Future of American Insurance & Reinsurance (FAIR) campaign, the Insurance Information Institute (Triple-I) is unveiling today an updated FAIR 2.0 website.

The website’s address remains the same——yet its future content will be expanding to other topical issues beyond pandemic-related business income (interruption) insurance matters.

To start, FAIR 2.0 will now address growing interest surrounding risk-based pricing of insurance products with educational resources such as fact sheets and blog posts, in addition to longer white papers.

In the coming months, the Triple-I will subsequently expand FAIR 2.0’s website to include the latest news on insurer Environmental, Social, and Governance (ESG) initiatives and human-centered innovation.

The pandemic gave rise to the Triple-I’s FAIR campaign, but the insurance industry’s essential role in the U.S. economy is always evolving and we want to continue to be a resource to media, policymakers, and broader industry stakeholders.

FAIR 2.0 will tell that story.

Sean Kevelighan
President and Chief Executive Officer
Insurance Information Institute

Hartford Defeats Pa. Restaurants’ Pandemic Coverage Suit


California Judge Rules In Favor of Insurer, Upholding Policy’s Virus Exclusion

This week in California, U.S. District Magistrate Judge Jacqueline Scott Corley ruled in favor of the insurance industry in a lawsuit on pandemic-related business interruption (BI) claims—filed by attorneys representing two Napa Valley-based French restaurants—on the basis that the virus exclusion precludes coverage for losses caused by the COVID-19 pandemic.
“While the court acknowledges the havoc that the COVID-19 pandemic and consequent shelter-in-place orders have caused businesses throughout this country and the world, the court cannot read an ambiguity into an insurance contract where none exists,” Judge Corley said.
This California ruling adds to the growing list of favorable rulings over the last year affirming insurers’ position that global pandemic risks are uninsurable. Insurers are doing what they can in response to the pandemic, including providing premium rebates, policy extensions, and making charitable donations, as they work to keep their promises to policyholders for covered losses.
The full article is available here. For more information and resources, visit


A Growing List Of Court Decisions Affirms The Necessity Of Direct Physical Damage For Business Interruption Insurance

Business interruption (BI) policies are not designed to cover pandemics and necessitate a direct physical loss to property to be activated. As such, the widespread litigation against insurers, attempting to alter BI policies to cover pandemic-related income losses, is a misguided effort that places the interests of attorneys ahead of business owners’.

To date, there has been an increasing number of court rulings affirming insurers’ position:

  • U.S. District Court for the Northern District of California: “A California magistrate judge on Tuesday dished out a dismissal in famed California [policyholder]’s suit seeking coverage for pandemic-related government shutdown orders, saying a virus exclusion precludes coverage for economic losses caused by COVID-19.”
  • U.S. District Court for the Southern District of Indiana: “An Indiana federal judge on Monday ruled that [policyholder] is not entitled to coverage for pandemic-related business interruption losses, finding that a clear virus exclusion in the [policyholder’s] policies forecloses their insurance claims.” (Law360, 3/8/21)
  • U.S. District Court in Cleveland: “‘This case turns on the meaning of the language ‘physical loss of or damage to’ property in the insurance policies,‘ Travelers wrote, but does not define the terms, the ruling said.” (Business Insurance, 2/19/21)
  • Civil District Court for the Parish of Orleans: “A New Orleans judge denied a motion for declaratory judgment that insurance coverage is owed to a restaurant for business income that was lost when it was required to close its dining room because of the COVID-19 pandemic.” (Claims Journal, 2/17/21)
  • U.S. District Court for the Southern District of Florida: “The plaintiff alleged that COVID-19 was ‘present’ at the insured properties on a particular date, but Chief Judge K. Michael Moore held that this allegation was insufficient to state a claim for coverage and granted the insurer’s motion to dismiss with prejudice.” (JD Supra, 1/25/21)
  • U.S. District Court for the Southern District of Florida: “Judge Robert N. Scola Jr. found that these allegations failed to state a claim for coverage under the policy’s business income coverage provision, which required ‘direct physical loss of or damage to’ the insured property to trigger coverage.” (JD Supra, 1/25/21)
  • U.S. District Court for the Western District of Pennsylvania: “A federal judge on Friday tossed [plaintiff’s] proposed class action seeking coverage from [insurer] for losses due to the coronavirus, finding that establishments limited to carry-out service had not sustained the ‘direct, physical loss‘ necessary to trigger their insurance policies.” (Law360, 1/15/21)
  • U.S. District Court for the Southern District of Mississippi: “A Hattiesburg, Mississippi, restaurant became the latest plaintiff to be denied COVID-19-related business interruption coverage by an insurer, when a federal district court ruled Wednesday there was no physical damage under the terms of its policy and that there was also no coverage because of a virus exclusion.” (Business Insurance, 11/5)
  • U.S. District for the Middle District of Florida: “The judge rejected [policyholder’s] argument that economic damage is synonymous with physical loss. ‘Plaintiff’s argument is unpersuasive because Florida law and the plain language of the policies reflect that actual, concrete damage is necessary,’ he said.” (WestLaw Today, 9/29)
  • U.S. District Court for the Northern District of California: “Judge Tigar wrote that because the government shutdown orders were preventative in nature — seeking to prevent the spread of the virus — that lends credence to [insurer’s] argument that they were not issued in response to physical loss or damage.” (Law360, 9/14)
  • U.S. District Court for the Southern District of California: “‘Plaintiffs are not the first policyholders to argue in court that government orders forcing their businesses to stop operating as a result of the COVID-19 pandemic trigger insurance under provisions similar or identical to the ones in the Policy here. Most courts have rejected these claims, finding that the government orders did not constitute direct physical loss or damage to property,’ Judge Bencivengo said in a ruling for [insurer].” (Business Insurance, 9/14)
  • U.S. District Court for the Eastern District of Michigan: The policy only covers lost income in the event of physical damage to a property, and even if that were not the case, the virus exclusion in the policy would bar pandemic-related coverage, the judge ruled. The ruling adds to the growing list of insurer wins on the issue of business interruption coverage for coronavirus-related losses.”  (Business Insurance, 9/4)
  • U.S. District Court for the Middle District of Florida: “Because [the plaintiff’s] damages resulted from COVID-19, which is clearly a virus, neither the Governor’s executive order narrowing dental services to only emergency procedures nor the disinfection of the dental office of the virus is a ‘Covered Cause of Loss’ under the plain language of the policy’s exclusion,’ the ruling states.” (Business Insider, 9/3)
  • U.S. District Court for the Central District of California: “‘An insured cannot recover by attempting to artfully plead impairment to economically valuable use of property as physical loss or damage to property,’ Wilson said, adding that [the plaintiff] has only plausibly alleged that in-person dining restrictions interfered with the use or value of its property — ‘not that the restrictions caused direct physical loss or damage.'” (Law360, 8/28)
  • U.S. District Court for the Western District of Texas: “In so ruling, Judge Ezra indicated that ‘while there is no doubt that the COVID-19 crisis severely affected Plaintiffs’ businesses, [insurer] cannot be held liable to pay business interruption insurance on these claims as there was no direct physical loss, and even if there were direct physical loss, the Virus Exclusion applies to bar Plaintiffs’ claims.'” (The National Law Review, 8/25)
  • District of Columbia Superior Court: “The judge found the plaintiffs offered no evidence that the virus was present in their inured properties and found that the mayor’s orders did not have any material or tangible effect on the insured’s properties.” (Insurance Journal, 8/7)
  • Michigan’s Ingham County 30th Judicial Circuit Court: “The court said that [the plaintiffs’] argument was ‘just simply nonsense, and it comes nowhere close to meeting the requirement that there has to be some physical alteration to or physical damage or tangible damage to the integrity of the building.'”  (JD Supra, 7/17)
  • Southern District Court of Florida & Eleventh Circuit Court: “Based on the Eleventh Circuit’s analysis, coverage will not be triggered for similar claims because the presence of the COVID-19 virus, or cleaning related to the virus, does not constitute direct physical loss or damage to property. The Eleventh Circuit’s holding provides helpful guidance that will most certainly be used in the analysis of COVID-19 business interruption claims.” (JD Supra, 7/21)

As highlighted in FAIR’s one-minute explainer video below, trial attorneys’ attempts to retroactively include the uninsurable pandemic risk in business interruption insurance contracts is detrimental to policyholders, communities, insurers, and economic growth. Insurers are doing what they can in response to the pandemic, as they work to keep their promises to policyholders for covered catastrophe losses such as hurricane damage.

For more information and resources, visit

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