Over the past couple of weeks, two additional court rulings have reaffirmed that business interruption (BI) policies are only triggered by direct physical damage to property and are not designed to cover pandemic-related losses. These are part of a nationwide litigation trend—spearheaded by trial attorneys—attempting to retroactively change BI contracts to cover uninsured pandemic claims, jeopardizing insurers’ ability to meet promises to policyholders’ on covered claims.

• 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 Georgia: “A Georgia federal judge has dismissed a [policyholder’s] COVID-19 business interruption coverage lawsuit, ruling that a government stay-at-home order did not cause the eatery to sustain ‘direct physical loss of or damage’ to its insured property or surrounding premises.” (HarrisMartin, 10/7)
  

To date, there has been a growing list of court decisions across the U.S. that affirm standard BI policies don’t cover COVID-19 shutdowns. Direct physical loss or damage must occur for a BI claim to be triggered, and government orders do not constitute direct physical loss or damage to property. For more information, please visit fairinsure.org.