September 10, 2021
COVID-19 业务 Interruption Lawsuits Move Through the Courts
保险 companies have been denying COVID-related business interruption claims unless the policy specifically includes damage from viral contamination.
Attempts in Congress and state legislatures to pass legislation forcing insurers to cover COVID-related losses have been resisted by insurers who point out that paying such claims would make many companies insolvent.
The National Association of 保险 Commissioners has also said that expanding the coverage obligations of insurance policies in this manner would be unconstitutional under the Contracts Clause of the U.S. 宪法, since there is no specific contractual obligation to cover these losses in most insurance policies.
不过, many businesses have filed lawsuits against insurers to enforce COVID business interruption claims. 一些企业, like restaurants and hotels, say their policies include provisions that expressly address losses caused by viruses.
Additional arguments are that COVID-19 losses are the result of governmental orders (to some extent policies may cover losses stemming from acts of civil authorities) or that the absence of tangible physical damage does not mean loss of use of the property and should therefore be covered. These suits also challenge the applicability of the virus exclusion found in most policies.
More than 1900 lawsuits have now been filed. And according to analysts from the University of 宾西法尼亚 who track these suits, more are on the way. But fewer than a quarter of those have been decided and of those decided 188 are on appeal. Appeals remain pending in 13 state courts: California, District of Columbia, 佛罗里达, 伊利诺斯州, 印第安纳州, 麻萨诸塞州, 密歇根, 新泽西, 纽约, 俄亥俄州, 俄克拉何马州, 宾西法尼亚, 和威斯康辛州. No state appellate court has yet rendered a decision.
“Although new COVID-19 business interruption filings and trial court rulings will continue capturing headlines well into the balance of this year and beyond, as courts of last resort, the appellate courts will ultimately shape the law on coverage for COVID-19 business interruption coverage,” according to attorneys Ashley Jordan and Jessica Gopiao of Reed Smith, 律师事务所.
The following five cases are expected to be heard soon:
海v. California Mutual 保险
The main question for the court is:
Does coverage for “direct physical loss of or damage to” property need to include a physical alteration of the property? 换句话说, can property be said to be damaged even if there’s nothing wrong with it except that it just can’t be used under the present circumstances?
Choctaw Nation v. 列克星敦
The lower court concluded that “direct physical loss” does include property that is normally usable but has been rendered unusable by COVID-19 and that its physical alteration was not necessary.
也, even though the policy has virus exclusions, the court said the language was not specific enough to rule out coverage against pandemics. The insurers have appealed the decision to the Supreme Court of 俄克拉何马州.
Gavrilides Management Company v. 密歇根 保险 Company
A 密歇根 电路 Court dismissed the policyholder’s suit saying that the virus exclusion does apply. 正在上诉中.
指甲Nook v. Hiscox 保险.
The 俄亥俄州 court said that the virus exclusion was clear and unambiguous. 正在上诉中.
Mudpie v. 旅行者
The Northern District Court of California, as with the 密歇根 and 俄亥俄州 courts, dismissed the complaint. But it is on appeal to the 9th U.S. 电路.
At this point, it does seem like Choctaw Nation v. 列克星敦 是个例外. 然而, policyholders and insurers alike should be glad to see these cases come up for review, 特别是 Mudpie v. 旅行者 because it will be heard in the 9th U.S. Court of Appeals. The only higher court is the U.S. Supreme Court, where the matter may ultimately be decided.