In case you missed it, a Michigan judge dismissed earlier this month COVID-19 business interruption claims brought by two restaurants. As this JD Supra article explains, the court found that business interruption (BI) policy only covers direct physical loss of or damage to property, and that since the policyholder alleged only loss of use of the restaurants, the policy did not apply. Most importantly, the judge further ruled that the policy’s virus exclusion would apply even if physical loss or damage had been alleged. 

Additionally, in response to policyholders’ attempt to circumvent the application of the virus exclusion by claiming that government orders, or civil authority—not COVID-19—caused the loss of use of the restaurants, the court was unequivocal in response: 

• This line of argument is “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.”

To get the facts on business interruption, visit fairinsure.org.